Bill Text: CA SB350 | 2015-2016 | Regular Session | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Clean Energy and Pollution Reduction Act of 2015.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Passed) 2015-10-07 - Chaptered by Secretary of State. Chapter 547, Statutes of 2015. [SB350 Detail]
Download: California-2015-SB350-Enrolled.html
Bill Title: Clean Energy and Pollution Reduction Act of 2015.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Passed) 2015-10-07 - Chaptered by Secretary of State. Chapter 547, Statutes of 2015. [SB350 Detail]
Download: California-2015-SB350-Enrolled.html
BILL NUMBER: SB 350 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 11, 2015
PASSED THE ASSEMBLY SEPTEMBER 11, 2015
AMENDED IN ASSEMBLY SEPTEMBER 11, 2015
AMENDED IN ASSEMBLY SEPTEMBER 4, 2015
AMENDED IN ASSEMBLY JULY 16, 2015
AMENDED IN ASSEMBLY JULY 8, 2015
INTRODUCED BY Senators De León and Leno
(Principal coauthor: Assembly Member Williams)
(Coauthors: Senators Allen, Hancock, and Monning)
(Coauthor: Assembly Member McCarty)
FEBRUARY 24, 2015
An act to add Section 44258.5 to the Health and Safety Code, to
amend Section 1720 of the Labor Code, to amend Sections 25310 and
25943 of, and to add Sections 25302.2 and 25327 to, the Public
Resources Code, and to amend Sections 359, 399.4, 399.11, 399.12,
399.13, 399.15, 399.16, 399.18, 399.21, 399.30, 454.55, 454.56,
701.1, 740.8, 9505, and 9620 of, to amend and repeal Sections 337 and
352 of, to add Sections 237.5, 365.2, 366.3, 454.51, 454.52, 740.12,
9621, and 9622 to, to add Article 17 (commencing with Section 400)
to Chapter 2.3 of Part 1 of Division 1 of, to add and repeal Article
5.5 (commencing with Section 359.5) of Chapter 2.3 of Part 1 of
Division 1 of, and to repeal Article 5 (commencing with Section 359)
of Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code,
relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 350, De León. Clean Energy and Pollution Reduction Act of 2015.
(1) Under existing law, the Public Utilities Commission (PUC) has
regulatory jurisdiction over public utilities, including electrical
corporations, community choice aggregators, and electric service
providers, while local publicly owned electric utilities are under
the direction of their governing boards. Existing law imposes various
regulations on public utilities and local publicly owned electric
utilities. Existing law establishes the California Renewables
Portfolio Standards (RPS) Program, which is codified in the Public
Utilities Act, with the target to increase the amount of electricity
generated per year from eligible renewable energy resources to an
amount that equals at least 33% of the total electricity sold to
retail customers per year by December 31, 2020. Under existing law, a
violation of the Public Utilities Act is a crime.
This bill would require that the amount of electricity generated
and sold to retail customers per year from eligible renewable energy
resources be increased to 50% by December 31, 2030, as provided. The
bill would make other revisions to the RPS Program and to certain
other requirements on public utilities and publicly owned electric
utilities.
Because certain of the above provisions are codified in the Public
Utilities Act, this bill would impose a state-mandated local program
by expanding the definition of a crime or establishing a new crime.
(2) Existing law requires the PUC to identify cost-effective
electricity efficiency savings and establish efficiency targets for
an electrical corporation to achieve, and to identify cost-effective
natural gas efficiency savings and establish efficiency targets for a
gas corporation to achieve. Existing law requires a local publicly
owned electric utility to identify all potential achievable
cost-effective electricity efficiency savings and to establish annual
targets for energy efficiency savings and demand reduction for the
next 10-year period.
This bill would require the State Energy Resources Conservation
and Development Commission to establish annual targets for statewide
energy efficiency savings and demand reduction that will achieve a
cumulative doubling of statewide energy efficiency savings in
electricity and natural gas final end uses of retail customers by
January 1, 2030. The bill would require the PUC to establish
efficiency targets for electrical and gas corporations consistent
with this goal. The bill would require local publicly owned electric
utilities to establish annual targets for energy efficiency savings
and demand reduction consistent with this goal.
(3) The existing restructuring of the electrical industry within
the Public Utilities Act provides for the establishment of the
Independent System Operator (ISO) and requires the ISO to ensure
efficient and reliable operation of the electrical transmission grid.
Existing law prohibits the ISO from entering into a multistate
entity or regional organization unless the ISO receives approval from
the Electricity Oversight Board. Existing law states the intent of
the Legislature to provide for the evolution of the ISO into a
regional organization to promote the development of regional
electricity transmission markets in the western states.
This bill would provide for the transformation of the ISO into a
regional organization, with the approval of the Legislature, pursuant
to a specified process.
(4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the Clean
Energy and Pollution Reduction Act of 2015.
SEC. 2. (a) The Legislature finds and declares that the Governor
has called for a new set of objectives in clean energy, clean air,
and pollution reduction for 2030 and beyond. Those objectives include
the following:
(1) To increase from 33 percent to 50 percent, the procurement of
our electricity from renewable sources.
(2) To double the energy efficiency savings in electricity and
natural gas final end uses of retail customers through energy
efficiency and conservation.
(b) It is the intent of the Legislature in enacting this act to
codify the targets described under subdivision (a) to ensure they are
permanent, enforceable, and quantifiable.
SEC. 3. Section 44258.5 is added to the Health and Safety Code, to
read:
44258.5. (a) For the purposes of this section, the following
terms mean the following:
(1) "Local publicly owned electric utility" has the same meaning
as defined in Section 224.3 of the Public Utilities Code.
(2) "Retail seller" has the same meaning as set forth in Section
399.12 of the Public Utilities Code.
(3) "Transportation electrification" has the same meaning as set
forth in Section 237.5 of the Public Utilities Code.
(b) The state board shall identify and adopt appropriate policies,
rules, or regulations to remove regulatory disincentives preventing
retail sellers and local publicly owned electric utilities from
facilitating the achievement of greenhouse gas emission reductions in
other sectors through increased investments in transportation
electrification. Policies to be considered shall include, but are not
limited to, an allocation of greenhouse gas emissions allowances to
retail sellers and local publicly owned electric utilities, or other
regulatory mechanisms, to account for increased greenhouse gas
emissions in the electric sector from transportation electrification.
SEC. 4. Section 1720 of the Labor Code is amended to read:
1720. (a) As used in this chapter, "public works" means:
(1) Construction, alteration, demolition, installation, or repair
work done under contract and paid for in whole or in part out of
public funds, except work done directly by any public utility company
pursuant to order of the Public Utilities Commission or other public
authority. For purposes of this paragraph, "construction" includes
work performed during the design and preconstruction phases of
construction, including, but not limited to, inspection and land
surveying work, and work performed during the postconstruction phases
of construction, including, but not limited to, all cleanup work at
the jobsite. For purposes of this paragraph, "installation" includes,
but is not limited to, the assembly and disassembly of freestanding
and affixed modular office systems.
(2) Work done for irrigation, utility, reclamation, and
improvement districts, and other districts of this type. "Public work"
does not include the operation of the irrigation or drainage system
of any irrigation or reclamation district, except as used in Section
1778 relating to retaining wages.
(3) Street, sewer, or other improvement work done under the
direction and supervision or by the authority of any officer or
public body of the state, or of any political subdivision or district
thereof, whether the political subdivision or district operates
under a freeholder's charter or not.
(4) The laying of carpet done under a building lease-maintenance
contract and paid for out of public funds.
(5) The laying of carpet in a public building done under contract
and paid for in whole or in part out of public funds.
(6) Public transportation demonstration projects authorized
pursuant to Section 143 of the Streets and Highways Code.
(7) (A) Infrastructure project grants from the California Advanced
Services Fund pursuant to Section 281 of the Public Utilities Code.
(B) For purposes of this paragraph, the Public Utilities
Commission is not the awarding body or the body awarding the
contract, as defined in Section 1722.
(b) For purposes of this section, "paid for in whole or in part
out of public funds" means all of the following:
(1) The payment of money or the equivalent of money by the state
or political subdivision directly to or on behalf of the public works
contractor, subcontractor, or developer.
(2) Performance of construction work by the state or political
subdivision in execution of the project.
(3) Transfer by the state or political subdivision of an asset of
value for less than fair market price.
(4) Fees, costs, rents, insurance or bond premiums, loans,
interest rates, or other obligations that would normally be required
in the execution of the contract, that are paid, reduced, charged at
less than fair market value, waived, or forgiven by the state or
political subdivision.
(5) Money loaned by the state or political subdivision that is to
be repaid on a contingent basis.
(6) Credits that are applied by the state or political subdivision
against repayment obligations to the state or political subdivision.
(c) Notwithstanding subdivision (b):
(1) Private residential projects built on private property are not
subject to the requirements of this chapter unless the projects are
built pursuant to an agreement with a state agency, redevelopment
agency, or local public housing authority.
(2) If the state or a political subdivision requires a private
developer to perform construction, alteration, demolition,
installation, or repair work on a public work of improvement as a
condition of regulatory approval of an otherwise private development
project, and the state or political subdivision contributes no more
money, or the equivalent of money, to the overall project than is
required to perform this public improvement work, and the state or
political subdivision maintains no proprietary interest in the
overall project, then only the public improvement work shall thereby
become subject to this chapter.
(3) If the state or a political subdivision reimburses a private
developer for costs that would normally be borne by the public, or
provides directly or indirectly a public subsidy to a private
development project that is de minimis in the context of the project,
an otherwise private development project shall not thereby become
subject to the requirements of this chapter.
(4) The construction or rehabilitation of affordable housing units
for low- or moderate-income persons pursuant to paragraph (5) or (7)
of subdivision (e) of Section 33334.2 of the Health and Safety Code
that are paid for solely with moneys from the Low and Moderate Income
Housing Fund established pursuant to Section 33334.3 of the Health
and Safety Code or that are paid for by a combination of private
funds and funds available pursuant to Section 33334.2 or 33334.3 of
the Health and Safety Code do not constitute a project that is paid
for in whole or in part out of public funds.
(5) Unless otherwise required by a public funding program, the
construction or rehabilitation of privately owned residential
projects is not subject to the requirements of this chapter if one or
more of the following conditions are met:
(A) The project is a self-help housing project in which no fewer
than 500 hours of construction work associated with the homes are to
be performed by the home buyers.
(B) The project consists of rehabilitation or expansion work
associated with a facility operated on a not-for-profit basis as
temporary or transitional housing for homeless persons with a total
project cost of less than twenty-five thousand dollars ($25,000).
(C) Assistance is provided to a household as either mortgage
assistance, downpayment assistance, or for the rehabilitation of a
single-family home.
(D) The project consists of new construction, expansion, or
rehabilitation work associated with a facility developed by a
nonprofit organization to be operated on a not-for-profit basis to
provide emergency or transitional shelter and ancillary services and
assistance to homeless adults and children. The nonprofit
organization operating the project shall provide, at no profit, not
less than 50 percent of the total project cost from nonpublic
sources, excluding real property that is transferred or leased. Total
project cost includes the value of donated labor, materials,
architectural, and engineering services.
(E) The public participation in the project that would otherwise
meet the criteria of subdivision (b) is public funding in the form of
below-market interest rate loans for a project in which occupancy of
at least 40 percent of the units is restricted for at least 20
years, by deed or regulatory agreement, to individuals or families
earning no more than 80 percent of the area median income.
(d) Notwithstanding any provision of this section to the contrary,
the following projects shall not, solely by reason of this section,
be subject to the requirements of this chapter:
(1) Qualified residential rental projects, as defined by Section
142(d) of the Internal Revenue Code, financed in whole or in part
through the issuance of bonds that receive allocation of a portion of
the state ceiling pursuant to Chapter 11.8 (commencing with Section
8869.80) of Division 1 of Title 2 of the Government Code on or before
December 31, 2003.
(2) Single-family residential projects financed in whole or in
part through the issuance of qualified mortgage revenue bonds or
qualified veterans' mortgage bonds, as defined by Section 143 of the
Internal Revenue Code, or with mortgage credit certificates under a
Qualified Mortgage Credit Certificate Program, as defined by Section
25 of the Internal Revenue Code, that receive allocation of a portion
of the state ceiling pursuant to Chapter 11.8 (commencing with
Section 8869.80) of Division 1 of Title 2 of the Government Code on
or before December 31, 2003.
(3) Low-income housing projects that are allocated federal or
state low-income housing tax credits pursuant to Section 42 of the
Internal Revenue Code, Chapter 3.6 (commencing with Section 50199.4)
of Part 1 of Division 31 of the Health and Safety Code, or Section
12206, 17058, or 23610.5 of the Revenue and Taxation Code, on or
before December 31, 2003.
(e) Notwithstanding paragraph (1) of subdivision (a),
construction, alteration, demolition, installation, or repair work on
the electric transmission system located in California constitutes a
public works project for the purposes of this chapter.
(f) If a statute, other than this section, or a regulation, other
than a regulation adopted pursuant to this section, or an ordinance
or a contract applies this chapter to a project, the exclusions set
forth in subdivision (d) do not apply to that project.
(g) For purposes of this section, references to the Internal
Revenue Code mean the Internal Revenue Code of 1986, as amended, and
include the corresponding predecessor sections of the Internal
Revenue Code of 1954, as amended.
(h) The amendments made to this section by either Chapter 938 of
the Statutes of 2001 or the act adding this subdivision shall not be
construed to preempt local ordinances requiring the payment of
prevailing wages on housing projects.
SEC. 5. Section 25302.2 is added to the Public Resources Code, to
read:
25302.2. As part of the 2019 edition of the integrated energy
policy report, the commission shall evaluate the actual energy
efficiency savings, as defined in Section 25310, from negative therm
interactive effects generated as a result of electricity efficiency
improvements.
SEC. 6. Section 25310 of the Public Resources Code is amended to
read:
25310. (a) For purposes of this section, the following terms have
the following meanings:
(1) "End use" means the purpose for which energy is used,
including, but not limited to, heating, cooling, or lighting, or
class of energy uses upon which an energy efficiency program is
focused, typically categorized by equipment purpose, equipment energy
use intensity, or building type.
(2) "Energy efficiency savings" means reduced electricity or
natural gas usage produced either by the installation of an energy
efficiency measure or the adoption of an energy efficiency practice
that maintains at least the same level of end-use service or by
conservation actions that reduce energy use by reducing the quantity
of baseline energy services demanded.
(b) On or before November 1, 2007, and by November 1 of every
third year thereafter, the commission in consultation with the Public
Utilities Commission and local publicly owned electric utilities, in
a public process that allows input from other stakeholders, shall
develop a statewide estimate of all potentially achievable
cost-effective electricity and natural gas efficiency savings and
establish targets for statewide annual energy efficiency savings and
demand reduction for the next 10-year period. The commission shall
base its estimate at least in part on information developed pursuant
to Sections 454.55, 454.56, 715, 9505, 9615, and 9615.5 of the Public
Utilities Code. The commission shall, for each electrical
corporation and each gas corporation, include in the integrated
energy policy report, a comparison of the public utility's annual
targets established pursuant to Sections 454.55 and 454.56, and the
public utility's actual energy efficiency savings and demand
reductions.
(c) (1) On or before November 1, 2017, the commission, in
collaboration with the Public Utilities Commission and local publicly
owned electric utilities, in a public process that allows input from
other stakeholders, shall establish annual targets for statewide
energy efficiency savings and demand reduction that will achieve a
cumulative doubling of statewide energy efficiency savings in
electricity and natural gas final end uses of retail customers by
January 1, 2030. The commission shall base the targets on a doubling
of the midcase estimate of additional achievable energy efficiency
savings, as contained in the California Energy Demand Updated
Forecast, 2015-2025, adopted by the commission, extended to 2030
using an average annual growth rate, and the targets adopted by local
publicly owned electric utilities pursuant to Section 9505 of the
Public Utilities Code, extended to 2030 using an average annual
growth rate, to the extent doing so is cost effective, feasible, and
will not adversely impact public health and safety.
(2) The commission may establish targets for the purposes of
paragraph (1) that aggregate energy efficiency savings from both
electricity and natural gas final end uses. Before establishing
aggregate targets, the commission shall, in a public process that
allows input from other stakeholders, adopt a methodology for
aggregating electricity and natural gas final end-use energy
efficiency savings in a consistent manner based on source of energy
reduction and other relevant factors.
(3) In establishing the targets pursuant to paragraph (1), the
commission shall assess the hourly and seasonal impact on statewide
and local electricity demand.
(4) In assessing the feasibility and cost-effectiveness of energy
efficiency savings for the purposes of paragraph (1), the commission
and the Public Utilities Commission shall consider the results of
energy efficiency potential studies that are not restricted by
previous levels of utility energy efficiency savings.
(5) The energy efficiency savings and demand reduction reported
for the purposes of achieving the targets established pursuant to
paragraph (1) shall be measured taking into consideration the overall
reduction in normalized metered electricity and natural gas
consumption where these measurement techniques are feasible and cost
effective.
(d) The targets established in subdivision (c) may be achieved
through energy efficiency savings and demand reduction resulting from
a variety of programs that include, but are not limited to, the
following:
(1) Appliance and building energy efficiency standards developed
and adopted pursuant to Section 25402.
(2) A comprehensive program to achieve greater energy efficiency
savings in California's existing residential and nonresidential
building stock pursuant to Section 25943.
(3) Programs funded and authorized pursuant to the California
Clean Energy Job Creation Act (Division 16.3 (commencing with Section
26200)).
(4) Programs funded by the Greenhouse Gas Reduction Fund
established pursuant to Section 16428.8 of the Government Code.
(5) Programs funded and authorized pursuant to this division.
(6) Programs of electrical or gas corporations, or community
choice aggregators, that provide financial incentives, rebates,
technical assistance, and support to their customers to increase
energy efficiency, authorized by the Public Utilities Commission.
(7) Programs of local publicly owned electric utilities that
provide financial incentives, rebates, technical assistance, and
support to their customers to increase energy efficiency pursuant to
Section 385 of the Public Utilities Code.
(8) Programs of electrical or gas corporations, local publicly
owned electric utilities, or community choice aggregators, that
achieve energy efficiency savings through operational, behavioral,
and retrocommissioning activities.
(9) Programs that save energy in final end uses by reducing
distribution feeder service voltage, known as conservation voltage
reduction.
(10) Programs that save energy in final end uses by using cleaner
fuels to reduce greenhouse gas emissions as measured on a lifecycle
basis from the provision of energy services.
(11) Property Assessed Clean Energy (PACE) programs.
(e) Beginning with the 2019 edition of the integrated energy
policy report and every two years thereafter, the commission shall
provide recommendations and an update on progress toward achieving a
doubling of energy efficiency savings in electricity and natural gas
final end uses of retail customers by January 1, 2030, pursuant to
paragraph (1) of subdivision (c). The commission shall also include
with the recommendations and update both of the following:
(1) An assessment of the effect of energy efficiency savings on
electricity demand statewide, in local service territories, and on an
hourly and seasonal basis.
(2) Specific strategies for, and an update on, progress toward
maximizing the contribution of energy efficiency savings in
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code.
SEC. 7. Section 25327 is added to the Public Resources Code, to
read:
25327. (a) The Legislature finds and declares all of the
following:
(1) There is insufficient information available to fully realize
the potential of solar photovoltaic energy generation to serve
low-income customers, including those in disadvantaged communities.
(2) There is insufficient understanding of the barriers to access
for low-income customers to all forms of renewable energy being
generated in the state.
(3) There is insufficient understanding of the barriers to access
for low-income customers to energy efficiency investments.
(4) There is insufficient understanding of the barriers to access
for low-income customers to zero-emission and near-zero-emission
transportation options.
(b) On or before January 1, 2017, the commission, with input from
relevant state agencies and the public, shall conduct and complete a
study on both of the following:
(1) Barriers to, and opportunities for, solar photovoltaic energy
generation as well as barriers to, and opportunities for, access to
other renewable energy by low-income customers.
(2) Barriers to contracting opportunities for local small
businesses in disadvantaged communities.
(c) On or before January 1, 2017, the commission, with input from
relevant state agencies and the public, shall develop and publish a
study on barriers for low-income customers to energy efficiency and
weatherization investments, including those in disadvantaged
communities, as well as recommendations on how to increase access to
energy efficiency and weatherization investments to low-income
customers.
(d) On or before January 1, 2017, the State Air Resources Board,
in consultation with the commission and with input from relevant
state agencies and the public, shall develop and publish a study on
barriers for low-income customers to zero-emission and
near-zero-emission transportation options, including those in
disadvantaged communities, as well as recommendations on how to
increase access to zero-emission and near-zero-emission
transportation options to low-income customers, including those in
disadvantaged communities.
SEC. 8. Section 25943 of the Public Resources Code is amended to
read:
25943. (a) (1) By March 1, 2010, the commission shall establish a
regulatory proceeding to develop and implement a comprehensive
program to achieve greater energy savings in California's existing
residential and nonresidential building stock. This program shall
comprise a complementary portfolio of techniques, applications, and
practices that will achieve greater energy efficiency in existing
residential and nonresidential structures that fall significantly
below the current standards in Title 24 of the California Code of
Regulations, as determined by the commission.
(2) The comprehensive program may include, but need not be limited
to, a broad range of energy assessments, building benchmarking,
energy rating, cost-effective energy efficiency improvements, public
and private sector energy efficiency financing options, public
outreach and education efforts, and green workforce training.
(3) The commission shall adopt, implement, and enforce a
responsible contractor policy for use across all ratepayer-funded
energy efficiency programs that involve installation or maintenance,
or both installation and maintenance, by building contractors to
ensure that retrofits meet high-quality performance standards and
reduce energy savings lost or foregone due to poor-quality
workmanship.
(4) The commission, in consultation with the Public Utilities
Commission, shall establish consumer protection guidelines for energy
efficiency products and services.
(b) To develop and implement the program specified in subdivision
(a), the commission shall do both of the following:
(1) Coordinate with the Public Utilities Commission and consult
with representatives from the Bureau of Real Estate, the Department
of Housing and Community Development, investor-owned and publicly
owned utilities, local governments, real estate licensees, commercial
and homebuilders, commercial property owners, small businesses,
mortgage lenders, financial institutions, home appraisers,
inspectors, energy rating organizations, consumer groups,
environmental and environmental justice groups, and other entities
the commission deems appropriate.
(2) Hold at least three public hearings in geographically diverse
locations throughout the state.
(c) In developing the requirements for the program specified in
subdivision (a), the commission shall consider all of the following:
(1) The amount of annual and peak energy savings, greenhouse gas
emission reductions, and projected customer utility bill savings that
will accrue from the program.
(2) The most cost-effective means and reasonable timeframes to
achieve the goals of the program.
(3) The various climatic zones within the state.
(4) An appropriate method to inform and educate the public about
the need for, benefits of, and environmental impacts of, the
comprehensive energy efficiency program.
(5) The most effective way to report the energy assessment results
and the corresponding energy efficiency improvements to the owner of
the residential or nonresidential building, including, among other
things, the following:
(A) Prioritizing the identified energy efficiency improvements.
(B) The payback period or cost-effectiveness of each improvement
identified.
(C) The various incentives, loans, grants, and rebates offered to
finance the improvements.
(D) Available financing options including all of the following:
(i) Mortgages or sales agreement components.
(ii) On-bill financing.
(iii) Contractual property tax assessments.
(iv) Home warranties.
(6) Existing statutory and regulatory requirements to achieve
energy efficiency savings and greenhouse gas emission reductions.
(7) A broad range of implementation approaches, including both
utility and nonutility administration of energy efficiency programs,
especially the use of not-for-profit and community-based
organizations that assist with deployment in disadvantaged
communities identified pursuant to Section 39711 of the Health and
Safety Code.
(8) Workforce development and job training for residents in
disadvantaged communities, including veterans, at-risk youth, and
members of the state and local community conservation corps.
(9) Any other considerations deemed appropriate by the commission.
(d) The program developed pursuant to this section shall do all of
the following:
(1) Minimize the overall costs of establishing and implementing
the comprehensive energy efficiency program requirements.
(2) Ensure, for residential buildings, that the energy efficiency
assessments, ratings, or improvements do not unreasonably or
unnecessarily affect the home purchasing process or the ability of
individuals to rent housing. A transfer of property subject to the
program implemented pursuant to this section shall not be invalidated
solely because of the failure of a person to comply with a provision
of the program.
(3) Ensure, for nonresidential buildings, that the energy
improvements do not have an undue economic impact on California
businesses.
(4) Determine, for residential buildings, the appropriateness of
the Home Energy Rating System (HERS) program to support the goals of
this section and whether there are a sufficient number of
HERS-certified raters available to meet the program requirements.
(5) Determine, for nonresidential structures, the availability of
an appropriate cost-effective energy efficiency assessment system and
whether there are a sufficient number of certified raters or
auditors available to meet the program requirements.
(6) Coordinate with the California Workforce Investment Board, the
Employment Training Panel, the California Community Colleges, and
other entities to ensure a qualified, well-trained workforce is
available to implement the program requirements.
(7) Promote greater project penetration in disadvantaged
communities identified pursuant to Section 39711 of the Health and
Safety Code, including
the deployment of energy efficiency surveys and audits, energy
efficiency retrofits and upgrades, weatherization, and followup
project inspections by state-certified community conservation corps
and other community-based workforce development organizations that
serve residents of disadvantaged communities, including veterans and
disadvantaged youth.
(8) Coordinate with, and avoid duplication of, existing
proceedings of the Public Utilities Commission and programs
administered by utilities.
(e) A home energy rating or energy assessment service does not
meet the requirements of this section unless the service has been
certified by the commission to be in compliance with the program
criteria developed pursuant to this section and is in conformity with
other applicable elements of the program.
(f) (1) The commission shall periodically update the criteria and
adopt any revision that, in its judgment, is necessary to improve or
refine program requirements after receiving public input.
(2) On or before January 1, 2017, and at least once every three
years thereafter, the commission shall adopt an update to the program
in furtherance of achieving a cumulative doubling of statewide
energy efficiency savings in electricity and natural gas final end
uses of retail customers by January 1, 2030.
(g) Before implementing an element of the program developed
pursuant to subdivision (a) that requires the expansion of statutory
authority of the commission or the Public Utilities Commission, the
commission and the Public Utilities Commission shall obtain
legislative approval for the expansion of their authorities.
(h) The commission shall report on the status of the program in
the integrated energy policy report pursuant to Section 25302.
(i) The commission shall fund activities undertaken pursuant to
this section from the Federal Trust Fund consistent with the federal
American Recovery and Reinvestment Act of 2009 (Public Law 111-5) or
other sources of nonstate funds available to the commission for the
purposes of this section.
(j) For purposes of this section, the following terms mean the
following:
(1) "Energy assessment" means a determination of an energy user's
energy consumption level, relative efficiency compared to other
users, and opportunities to achieve greater efficiency or improve
energy resource utilization.
(2) "Energy efficiency" means delivering equal or more services
with less energy input from an energy source.
SEC. 9. Section 237.5 is added to the Public Utilities Code, to
read:
237.5. "Transportation electrification" means the use of
electricity from external sources of electrical power, including the
electrical grid, for all or part of vehicles, vessels, trains, boats,
or other equipment that are mobile sources of air pollution and
greenhouse gases and the related programs and charging and propulsion
infrastructure investments to enable and encourage this use of
electricity.
SEC. 10. Section 337 of the Public Utilities Code is amended to
read:
337. (a) The Independent System Operator governing board shall be
composed of a five-member independent governing board of directors
appointed by the Governor and subject to confirmation by the Senate.
Any reference in this chapter or in any other provision of law to the
Independent System Operator governing board means the independent
governing board appointed under this subdivision.
(b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Independent System
Operator.
(c) (1) All appointments shall be for three-year terms.
(2) There is no limit on the number of terms that may be served by
any member.
(d) The Oversight Board shall require the articles of
incorporation and bylaws of the Independent System Operator to be
revised in accordance with this section, and shall make filings with
the Federal Energy Regulatory Commission as the Oversight Board
determines to be necessary.
(e) For the purposes of the initial appointments to the
Independent System Operator governing board, as provided in
subdivision (a), the Governor shall appoint one member to a one-year
term, two members to a two-year term, and two members to a three-year
term.
(f) This section becomes inoperative on the date on which the
governance modifications set forth in Section 359.5 become effective
and is repealed on January 1 of the following year.
SEC. 11. Section 352 of the Public Utilities Code is amended to
read:
352. (a) The Independent System Operator may not enter into a
multistate entity or a regional organization as authorized in Section
359 unless that entry is approved by the Oversight Board.
(b) This section becomes inoperative on the date on which the
governance modifications set forth in Section 359.5 become effective
and is repealed on January 1 of the following year.
SEC. 12. Section 359 of the Public Utilities Code is amended to
read:
359. (a) It is the intent of the Legislature to provide for the
evolution of the Independent System Operator into a regional
organization to promote the development of regional electricity
transmission markets in the western states and to improve the access
of consumers served by the Independent System Operator to those
markets.
(b) The preferred means by which the voluntary evolution described
in subdivision (a) should occur is through the adoption of a
regional compact or other comparable agreement among cooperating
party states, the retail customers of which states would reside
within the geographic territories served by the Independent System
Operator.
(c) The agreement described in subdivision (b) should provide for
all of the following:
(1) An equitable process for the appointment or confirmation by
party states of members of the governing boards of the Independent
System Operator.
(2) A respecification of the size, structure, representation,
eligible membership, nominating procedures, and member terms of
service of the governing boards of the Independent System Operator.
(3) Mechanisms by which each party state, jointly or separately,
can oversee effectively the actions of the Independent System
Operator as those actions relate to the assurance of electricity
system reliability within the party state and to matters that affect
electricity sales to the retail customers of the party state or
otherwise affect the general welfare of the electricity consumers and
the general public of the party state.
(4) The adherence by publicly owned and investor-owned utilities
located in party states to enforceable standards and protocols to
protect the reliability of the interconnected regional transmission
and distribution systems.
(d) (1) Except for paragraphs (2) and (3), this section becomes
inoperative on January 1, 2016.
(2) This section becomes operative on January 1, 2019, if Article
5.5 (commencing with Section 359.5) becomes inoperative on that date.
(3) If the governance modifications set forth in Section 359.5
become effective, this article is repealed on January 1 of the year
following the effective date of the governance modifications.
SEC. 13. Article 5.5 (commencing with Section 359.5) is added to
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to
read:
Article 5.5. Transformation of the Independent System Operator
359.5. (a) It is the intent of the Legislature to provide for the
transformation of the Independent System Operator into a regional
organization to promote the development of regional electricity
transmission markets in the western states and to improve the access
of consumers served by the Independent System Operator to those
markets, and that the transformation should only occur where it is in
the best interests of California and its ratepayers.
(b) The transformation of the Independent System Operator into a
regional organization shall not alter its obligations to the state or
to electricity consumers within the state or its obligations to
comply with state laws. The Independent System Operator shall retain
its obligations set forth in Section 345.5, shall maintain the
standards for open meetings and public access to corporate records as
set forth in Section 345.5, and shall facilitate effective tracking
and reporting mechanisms in support of state enforcement of Division
25.5 (commencing with Section 38500) of the Health and Safety Code.
(c) The voluntary transformation described in subdivision (a)
shall occur through additional transmission owners joining the
Independent System Operator with approval from their own state or
local regulatory authorities, as applicable.
(d) Modifications to the Independent System Operator governance
structure, through changes to its bylaws or other corporate
governance documents, would be needed to allow this transformation.
(e) The Independent System Operator shall prepare the governance
modifications needed as described in subdivision (d), but they shall
not become effective until all of the following occur:
(1) The Independent System Operator conducts one or more studies
of the impacts of a regional market enabled by the proposed
governance modifications, including overall benefits to ratepayers,
including the creation or retention of jobs and other benefits to the
California economy, environmental impacts in California and
elsewhere, impacts in disadvantaged communities, emissions of
greenhouse gases and other air pollutants, and reliability and
integration of renewable energy resources. The modeling, including
all assumptions underlying the modeling, shall be made available for
public review.
(2) The commission, Energy Commission, and State Air Resources
Board jointly hold at least one public workshop where the Independent
System Operator presents the proposed governance modifications and
the results of the studies described in paragraph (1). The related
Independent System Operator documents shall be made public before the
workshop.
(3) The Independent System Operator submits to the Governor the
studies described in paragraph (1) and revised bylaws or other
corporate governance documents setting forth the proposed
modifications to its governance structure.
(4) The Governor transmits to the Legislature the studies
described in paragraph (1) and revised bylaws or other corporate
governance documents setting forth the proposed modifications to its
governance structure, no later than December 31, 2017.
(5) The Legislature enacts a statute implementing the revised
governance changes.
(f) The Independent System Operator shall expeditiously adopt the
modifications to its governance structure enacted by the Legislature
pursuant to paragraph (5) of subdivision (e) so that the
modifications become effective before new transmission owners from
outside California complete the process of joining the Independent
System Operator.
(g) The revised governance structure shall not alter or abridge
the contractual rights of a transmission owner to withdraw from
participation in the Independent System Operator.
(h) One year after the seating of the new, revised governing board
of the Independent System Operator pursuant to the modifications of
its governance structure, and every two years thereafter, the
Independent System Operator shall prepare a report to the states
within the areas it serves documenting its furtherance of applicable
state and federal laws and regulations affecting the electric
industry.
(i) This article is repealed on January 1, 2019, if a statute
implementing the governance modifications has not become effective on
or before January 1, 2019.
SEC. 14. Section 365.2 is added to the Public Utilities Code, to
read:
365.2. The commission shall ensure that bundled retail customers
of an electrical corporation do not experience any cost increases as
a result of retail customers of an electrical corporation electing to
receive service from other providers. The commission shall also
ensure that departing load does not experience any cost increases as
a result of an allocation of costs that were not incurred on behalf
of the departing load.
SEC. 15. Section 366.3 is added to the Public Utilities Code, to
read:
366.3. Bundled retail customers of an electrical corporation
shall not experience any cost increase as a result of the
implementation of a community choice aggregator program. The
commission shall also ensure that departing load does not experience
any cost increases as a result of an allocation of costs that were
not incurred on behalf of the departing load.
SEC. 16. Section 399.4 of the Public Utilities Code is amended to
read:
399.4. (a) (1) In order to ensure that prudent investments in
energy efficiency continue to be made that produce cost-effective
energy savings, reduce customer demand, and contribute to the safe
and reliable operation of the electric distribution grid, it is the
policy of this state and the intent of the Legislature that the
commission shall continue to administer cost-effective energy
efficiency programs authorized pursuant to existing statutory
authority.
(2) As used in this section, the term "energy efficiency"
includes, but is not limited to, cost-effective activities to achieve
peak load reduction that improve end-use efficiency, lower customers'
bills, and reduce system needs.
(b) (1) Any rebates or incentives offered by a public utility for
an energy efficiency improvement or installation of energy efficient
components, equipment, or appliances in buildings shall be provided
only if the recipient of the rebate or incentive certifies that the
improvement or installation has complied with any applicable
permitting requirements and, if a contractor performed the
installation or improvement, that the contractor holds the
appropriate license for the work performed.
(2) This subdivision does not imply or create authority or
responsibility, or expand existing authority or responsibility, of a
public utility for the enforcement of the building energy and water
efficiency standards adopted pursuant to subdivision (a) or (b) of
Section 25402 of the Public Resources Code, or appliance efficiency
standards and certification requirements adopted pursuant to
subdivision (c) of Section 25402 of the Public Resources Code.
(c) The commission, in evaluating energy efficiency investments
under its existing statutory authority, shall also ensure that local
and regional interests, multifamily dwellings, and energy service
industry capabilities are incorporated into program portfolio design
and that local governments, community-based organizations, and energy
efficiency service providers are encouraged to participate in
program implementation where appropriate.
(d) The commission, in a new or existing proceeding, shall review
and update its policies governing energy efficiency programs funded
by utility customers to facilitate achieving the targets established
pursuant to subdivision (c) of Section 25310 of the Public Resources
Code. In updating its policies, the commission shall, at a minimum,
do all of the following:
(1) Authorize market transformation programs with appropriate
levels of funding to achieve deeper energy efficiency savings.
(2) Authorize pay for performance programs that link incentives
directly to measured energy savings. As part of pay for performance
programs authorized by the commission, customers should be reasonably
compensated for developing and implementing an energy efficiency
plan, with a portion of their incentive reserved pending post project
measurement results.
(3) Authorize programs to achieve deeper savings through
operational, behavioral, and retrocommissioning activities.
(4) Ensure that customers have certainty in the values and
methodology used to determine energy efficiency incentives by basing
the amount of any incentives provided by gas and electrical
corporations on the values and methodology contained in the executed
customer agreement. Incentive payments shall be based on measured
results.
SEC. 17. Section 399.11 of the Public Utilities Code is amended to
read:
399.11. The Legislature finds and declares all of the following:
(a) In order to attain a target of generating 20 percent of total
retail sales of electricity in California from eligible renewable
energy resources by December 31, 2013, 33 percent by December 31,
2020, and 50 percent by December 31, 2030, it is the intent of the
Legislature that the commission and the Energy Commission implement
the California Renewables Portfolio Standard Program described in
this article.
(b) Achieving the renewables portfolio standard through the
procurement of various electricity products from eligible renewable
energy resources is intended to provide unique benefits to
California, including all of the following, each of which
independently justifies the program:
(1) Displacing fossil fuel consumption within the state.
(2) Adding new electrical generating facilities in the
transmission network within the Western Electricity Coordinating
Council service area.
(3) Reducing air pollution in the state.
(4) Meeting the state's climate change goals by reducing emissions
of greenhouse gases associated with electrical generation.
(5) Promoting stable retail rates for electric service.
(6) Meeting the state's need for a diversified and balanced energy
generation portfolio.
(7) Assistance with meeting the state's resource adequacy
requirements.
(8) Contributing to the safe and reliable operation of the
electrical grid, including providing predictable electrical supply,
voltage support, lower line losses, and congestion relief.
(9) Implementing the state's transmission and land use planning
activities related to development of eligible renewable energy
resources.
(c) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Resources Program
administered by the Energy Commission and established pursuant to
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(d) New and modified electric transmission facilities may be
necessary to facilitate the state achieving its renewables portfolio
standard targets.
(e) (1) Supplying electricity to California end-use customers that
is generated by eligible renewable energy resources is necessary to
improve California's air quality and public health, and the
commission shall ensure rates are just and reasonable, and are not
significantly affected by the procurement requirements of this
article. This electricity may be generated anywhere in the
interconnected grid that includes many states, and areas of both
Canada and Mexico.
(2) This article requires generating resources located outside of
California that are able to supply that electricity to California
end-use customers to be treated identically to generating resources
located within the state, without discrimination.
(3) California electrical corporations have already executed, and
the commission has approved, power purchase agreements with eligible
renewable energy resources located outside of California that will
supply electricity to California end-use customers. These resources
will fully count toward meeting the renewables portfolio standard
procurement requirements.
SEC. 18. Section 399.12 of the Public Utilities Code is amended to
read:
399.12. For purposes of this article, the following terms have
the following meanings:
(a) "Conduit hydroelectric facility" means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a beneficial
use.
(b) "Balancing authority" means the responsible entity that
integrates resource plans ahead of time, maintains load-interchange
generation balance within a balancing authority area, and supports
interconnection frequency in real time.
(c) "Balancing authority area" means the collection of generation,
transmission, and loads within the metered boundaries of the area
within which the balancing authority maintains the electrical
load-resource balance.
(d) "California balancing authority" is a balancing authority with
control over a balancing authority area primarily located in this
state and operating for retail sellers and local publicly owned
electric utilities subject to the requirements of this article and
includes the Independent System Operator (ISO) and a local publicly
owned electric utility operating a transmission grid that is not
under the operational control of the ISO. A California balancing
authority is responsible for the operation of the transmission grid
within its metered boundaries which is not limited by the political
boundaries of the State of California.
(e) "Eligible renewable energy resource" means an electrical
generating facility that meets the definition of a "renewable
electrical generation facility" in Section 25741 of the Public
Resources Code, subject to the following:
(1) (A) An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005. A new hydroelectric facility that
commences generation of electricity after December 31, 2005, is not
an eligible renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the volume or
timing of streamflow.
(B) Notwithstanding subparagraph (A), a conduit hydroelectric
facility of 30 megawatts or less that commenced operation before
January 1, 2006, is an eligible renewable energy resource. A conduit
hydroelectric facility of 30 megawatts or less that commences
operation after December 31, 2005, is an eligible renewable energy
resource so long as it does not cause an adverse impact on instream
beneficial uses or cause a change in the volume or timing of
streamflow.
(C) A facility approved by the governing board of a local publicly
owned electric utility prior to June 1, 2010, for procurement to
satisfy renewable energy procurement obligations adopted pursuant to
former Section 387, shall be certified as an eligible renewable
energy resource by the Energy Commission pursuant to this article, if
the facility is a "renewable electrical generation facility" as
defined in Section 25741 of the Public Resources Code.
(D) (i) A small hydroelectric generation unit with a nameplate
capacity not exceeding 40 megawatts that is operated as part of a
water supply or conveyance system is an eligible renewable energy
resource only for the retail seller or local publicly owned electric
utility that procured the electricity from the unit as of December
31, 2005. No unit shall be eligible pursuant to this subparagraph if
an application for certification is submitted to the Energy
Commission after January 1, 2013. Only one retail seller or local
publicly owned electric utility shall be deemed to have procured
electricity from a given unit as of December 31, 2005.
(ii) Notwithstanding clause (i), a local publicly owned electric
utility that meets the criteria of subdivision (j) of Section 399.30
may sell to another local publicly owned electric utility electricity
from small hydroelectric generation units that qualify as eligible
renewable energy resources under clause (i), and that electricity may
be used by the local publicly owned electric utility that purchased
the electricity to meet its renewables portfolio standard procurement
requirements. The total of all those sales from the utility shall be
no greater than 100,000 megawatthours of electricity.
(iii) The amendments made to this subdivision by the act adding
this subparagraph are intended to clarify existing law and apply from
December 10, 2011.
(2) (A) A facility engaged in the combustion of municipal solid
waste shall not be considered an eligible renewable energy resource.
(B) Subparagraph (A) does not apply to contracts entered into
before January 1, 2017, for the procurement of renewable energy
resources from a facility located in Stanislaus County that was
operational prior to September 26, 1996.
(f) "Procure" means to acquire through ownership or contract.
(g) "Procurement entity" means any person or corporation
authorized by the commission to enter into contracts to procure
eligible renewable energy resources on behalf of customers of a
retail seller pursuant to subdivision (f) of Section 399.13.
(h) (1) "Renewable energy credit" means a certificate of proof
associated with the generation of electricity from an eligible
renewable energy resource, issued through the accounting system
established by the Energy Commission pursuant to Section 399.25, that
one unit of electricity was generated and delivered by an eligible
renewable energy resource.
(2) "Renewable energy credit" includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of the
Health and Safety Code and any credits or payments associated with
the reduction of solid waste and treatment benefits created by the
utilization of biomass or biogas fuels.
(3) (A) Electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a de
minimis quantity used to generate electricity in the same process
through which the facility converts renewable fuel to electricity,
shall not result in the creation of a renewable energy credit. The
Energy Commission shall set the de minimis quantity of nonrenewable
fuels for each renewable energy technology at a level of no more than
2 percent of the total quantity of fuel used by the technology to
generate electricity. The Energy Commission may adjust the de minimis
quantity for an individual facility, up to a maximum of 5 percent,
if it finds that all of the following conditions are met:
(i) The facility demonstrates that the higher quantity of
nonrenewable fuel will lead to an increase in generation from the
eligible renewable energy facility that is significantly greater than
generation from the nonrenewable fuel alone.
(ii) The facility demonstrates that the higher quantity of
nonrenewable fuels will reduce the variability of its electrical
output in a manner that results in net environmental benefits to the
state.
(iii) The higher quantity of nonrenewable fuel is limited to
either natural gas or hydrogen derived by reformation of a fossil
fuel.
(B) Electricity generated by a small hydroelectric generation
facility shall not result in the creation of a renewable energy
credit unless the facility meets the requirements of subparagraph (A)
or (D) of paragraph (1) of subdivision (e).
(C) Electricity generated by a conduit hydroelectric generation
facility shall not result in the creation of a renewable energy
credit unless the facility meets the requirements of subparagraph (B)
of paragraph (1) of subdivision (e).
(D) Electricity generated by a facility engaged in the combustion
of municipal solid waste shall not result in the creation of a
renewable energy credit. This subparagraph does not apply to
renewable energy credits that were generated before January 1, 2017,
by a facility engaged in the combustion of municipal solid waste
located in Stanislaus County that was operational prior to September
26, 1996, and sold pursuant to contacts entered into before January
1, 2017.
(i) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller or a local publicly owned electric utility is
required to procure pursuant to this article.
(j) "Retail seller" means an entity engaged in the retail sale of
electricity to end-use customers located within the state, including
any of the following:
(1) An electrical corporation, as defined in Section 218.
(2) A community choice aggregator. A community choice aggregator
shall participate in the renewables portfolio standard program
subject to the same terms and conditions applicable to an electrical
corporation.
(3) An electric service provider, as defined in Section 218.3. The
electric service provider shall be subject to the same terms and
conditions applicable to an electrical corporation pursuant to this
article. This paragraph does not impair a contract entered into
between an electric service provider and a retail customer prior to
the suspension of direct access by the commission pursuant to Section
80110 of the Water Code.
(4) "Retail seller" does not include any of the following:
(A) A corporation or person employing cogeneration technology or
producing electricity consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(C) A local publicly owned electric utility.
(k) "WECC" means the Western Electricity Coordinating Council of
the North American Electric Reliability Corporation, or a successor
to the corporation.
SEC. 19. Section 399.13 of the Public Utilities Code is amended to
read:
399.13. (a) (1) The commission shall direct each electrical
corporation to annually prepare a renewable energy procurement plan
that includes the matter in paragraph (5), to satisfy its obligations
under the renewables portfolio standard. To the extent feasible,
this procurement plan shall be proposed, reviewed, and adopted by the
commission as part of, and pursuant to, a general procurement plan
process. The commission shall require each electrical corporation to
review and update its renewable energy procurement plan as it
determines to be necessary. The commission shall require all other
retail sellers to prepare and submit renewable energy procurement
plans that address the requirements identified in paragraph (5).
(2) Every electrical corporation that owns electrical transmission
facilities shall annually prepare, as part of the Federal Energy
Regulatory Commission Order 890 process, and submit to the
commission, a report identifying any electrical transmission
facility, upgrade, or enhancement that is reasonably necessary to
achieve the renewables portfolio standard procurement requirements of
this article. Each report shall look forward at least five years
and, to ensure that adequate investments are made in a timely manner,
shall include a preliminary schedule when an application for a
certificate of public convenience and necessity will be made,
pursuant to Chapter 5 (commencing with Section 1001), for any
electrical transmission facility identified as being reasonably
necessary to achieve the renewable energy resources procurement
requirements of this article. Each electrical corporation that owns
electrical transmission facilities shall ensure that project-specific
interconnection studies are completed in a timely manner.
(3) The commission shall direct each retail seller to prepare and
submit an annual compliance report that includes all of the
following:
(A) The current status and progress made during the prior year
toward procurement of eligible renewable energy resources as a
percentage of retail sales, including, if applicable, the status of
any necessary siting and permitting approvals from federal, state,
and local agencies for those eligible renewable energy resources
procured by the retail seller, and the current status of compliance
with the portfolio content requirements of subdivision (c) of Section
399.16, including procurement of eligible renewable energy resources
located outside the state and within the WECC and unbundled
renewable energy credits.
(B) If the retail seller is an electrical corporation, the current
status and progress made during the prior year toward construction
of, and upgrades to, transmission and distribution facilities and
other electrical system components it owns to interconnect eligible
renewable energy resources and to supply the electricity generated by
those resources to load, including the status of planning, siting,
and permitting transmission facilities by federal, state, and local
agencies.
(C) Recommendations to remove impediments to making progress
toward achieving the renewable energy resources procurement
requirements established pursuant to this article.
(4) The commission shall adopt, by rulemaking, all of the
following:
(A) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit eligible renewable energy
resources to comply with the California Renewables Portfolio Standard
Program obligations on a total cost and best-fit basis. This process
shall take into account all of the following:
(i) Estimates of indirect costs associated with needed
transmission investments.
(ii) The cost impact of procuring the eligible renewable energy
resources on the electrical corporation's electricity portfolio.
(iii) The viability of the project to construct and reliably
operate the eligible renewable energy resource, including the
developer's experience, the feasibility of the technology used to
generate electricity, and the risk that the facility will not be
built, or that construction will be delayed, with the result that
electricity will not be supplied as required by the contract.
(iv) Workforce recruitment, training, and retention efforts,
including the employment growth associated with the construction and
operation of eligible renewable energy resources and goals for
recruitment and training of women, minorities, and disabled veterans.
(v) (I) Estimates of electrical corporation expenses resulting
from integrating and operating eligible renewable energy resources,
including, but not limited to, any additional wholesale energy and
capacity costs associated with integrating each eligible renewable
resource.
(II) No later than December 31, 2015, the commission shall approve
a methodology for determining the integration costs described in
subclause (I).
(vi) Consideration of any statewide greenhouse gas emissions limit
established pursuant to the California Global Warming Solutions Act
of 2006 (Division 25.5 (commencing with Section 38500) of the Health
and Safety Code).
(vii) Consideration of capacity and system reliability of the
eligible renewable energy resource to ensure grid reliability.
(B) Rules permitting retail sellers to accumulate, beginning
January 1, 2011, excess procurement in one compliance period to be
applied to any subsequent compliance period. The rules shall apply
equally to all retail sellers. In determining the quantity of excess
procurement for the applicable compliance period, the commission
shall retain the rules adopted by the commission and in effect as of
January 1, 2015, for the compliance period specified in subparagraphs
(A) to (C), inclusive, of paragraph (1) of subdivision (b) of
Section 399.15. For any subsequent compliance period, the rules shall
allow the following:
(i) For electricity products meeting the portfolio content
requirements of paragraph (1) of subdivision (b) of Section 399.16,
contracts of any duration may count as excess procurement.
(ii) Electricity products meeting the portfolio content
requirements of paragraph (2) or (3) of subdivision (b) of Section
399.16 shall not be counted as excess procurement. Contracts of any
duration for electricity products meeting the portfolio content
requirements of paragraph (2) or (3) of subdivision (b) of Section
399.16 that are credited towards a compliance period shall not be
deducted from a retail seller's procurement for purposes of
calculating excess procurement.
(iii) If a retail seller notifies the commission that it will
comply with the provisions of subdivision (b) for the compliance
period beginning January 1, 2017, the provisions of clauses (i) and
(ii) shall take effect for that retail seller for that compliance
period.
(C) Standard terms and conditions to be used by all electrical
corporations in contracting for eligible renewable energy resources,
including performance requirements for renewable generators. A
contract for the purchase of electricity generated by an eligible
renewable energy resource, at a minimum, shall include the renewable
energy credits associated with all electricity generation specified
under the contract. The standard terms and conditions shall include
the requirement that, no later than six months after the commission's
approval of an electricity purchase agreement entered into pursuant
to this article, the following information about the agreement shall
be disclosed by the commission: party names, resource type, project
location, and project capacity.
(D) An appropriate minimum margin of procurement above the minimum
procurement level necessary to comply with the renewables portfolio
standard to mitigate the risk that renewable projects planned or
under contract are delayed or canceled. This paragraph does not
preclude an electrical corporation from voluntarily proposing a
margin of procurement above the appropriate minimum margin
established by the commission.
(5) Consistent with the goal of increasing California's reliance
on eligible renewable energy resources, the renewable energy
procurement plan shall include all of the following:
(A) An assessment of annual or multiyear portfolio supplies and
demand to determine the optimal mix of eligible renewable energy
resources with deliverability characteristics that may include
peaking, dispatchable, baseload, firm, and as-available capacity.
(B) Potential compliance delays related to the conditions
described in paragraph (5) of subdivision (b) of Section 399.15.
(C) A bid solicitation setting forth the need for eligible
renewable energy resources of each deliverability characteristic,
required online dates, and locational preferences, if any.
(D) A status update on the development schedule of all eligible
renewable energy resources currently under contract.
(E) Consideration of mechanisms for price adjustments associated
with the costs of key components for eligible renewable energy
resource projects with online dates more than 24 months after the
date of contract execution.
(F) An assessment of the risk that an eligible renewable energy
resource will not be built, or that construction will be delayed,
with the result that electricity will not be delivered as required by
the contract.
(6) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years duration, unless the commission approves of a
contract of shorter duration.
(7) In soliciting and procuring eligible renewable energy
resources for California-based projects, each electrical corporation
shall give preference to renewable energy projects that provide
environmental and economic benefits to communities afflicted with
poverty or high unemployment, or that suffer from high emission
levels of toxic air contaminants, criteria air pollutants, and
greenhouse gases.
(8) In soliciting and procuring eligible renewable energy
resources, each retail seller shall consider the best-fit attributes
of resource types that ensure a balanced resource mix to maintain the
reliability of the electrical grid.
(b) A retail seller may enter into a combination of long- and
short-term contracts for electricity and associated renewable energy
credits. Beginning January 1, 2021, at least 65 percent of the
procurement a retail seller counts toward the renewables portfolio
standard requirement of each compliance period shall be from its
contracts of 10 years or more in duration or in its ownership or
ownership agreements for eligible renewable energy resources.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's renewable energy resource procurement plan
prior to the commencement of renewable energy procurement pursuant to
this article by an electrical corporation. The commission shall
assess adherence to the approved renewable energy resource
procurement plans in determining compliance with the obligations of
this article.
(d) Unless previously preapproved by the commission, an electrical
corporation shall submit a contract for the generation of an
eligible renewable energy resource to the commission for review and
approval consistent with an approved renewable energy resource
procurement plan. If the commission determines that the bid prices
are elevated due to a lack of effective competition among the
bidders, the commission shall direct the electrical corporation to
renegotiate the contracts or conduct a new solicitation.
(e) If an electrical corporation fails to comply with a commission
order adopting a renewable energy resource procurement plan, the
commission shall exercise its authority to require compliance.
(f) (1) The commission may authorize a procurement entity to enter
into contracts on behalf of customers of a retail seller for
electricity products from eligible renewable energy resources to
satisfy the retail seller's renewables portfolio standard procurement
requirements. The commission shall not require any person or
corporation to act as a procurement entity or require any party to
purchase eligible renewable energy resources from a procurement
entity.
(2) Subject to review and approval by the commission, the
procurement entity shall be permitted to recover reasonable
administrative and procurement costs through the retail rates of
end-use customers that are served by the procurement entity and are
directly benefiting from the procurement of eligible renewable energy
resources.
(g) Procurement and administrative costs associated with contracts
entered into by an electrical corporation for eligible renewable
energy resources pursuant to this article and approved by the
commission are reasonable and prudent and shall be recoverable in
rates.
(h) Construction, alteration, demolition, installation, and repair
work on an eligible renewable energy resource that receives
production incentives pursuant to Section 25742 of the Public
Resources Code, including work performed to qualify, receive, or
maintain production incentives, are "public works" for the purposes
of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2
of the Labor Code.
SEC. 20. Section 399.15 of the Public Utilities Code is amended to
read:
399.15. (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all retail sellers to procure a minimum quantity of
electricity products from eligible renewable energy resources as a
specified percentage of total kilowatthours sold to their retail
end-use customers each compliance period to achieve the targets
established under this article. For any retail seller procuring at
least 14 percent of retail sales from eligible renewable energy
resources in 2010, the deficits associated with any previous
renewables portfolio standard shall not be added to any procurement
requirement pursuant to this article.
(b) The commission shall implement renewables portfolio standard
procurement requirements only as follows:
(1) Each retail seller shall procure a minimum quantity of
eligible renewable energy resources for each of the following
compliance periods:
(A) January 1, 2011, to December 31, 2013, inclusive.
(B) January 1, 2014, to December 31, 2016, inclusive.
(C) January 1, 2017, to December 31, 2020, inclusive.
(D) January 1, 2021, to December 31, 2024, inclusive.
(E) January 1, 2025, to December 31, 2027, inclusive.
(F) January 1, 2028, to December 31, 2030, inclusive.
(2) (A) No later than January 1, 2017, the commission shall
establish the quantity of electricity products from eligible
renewable energy resources to be procured by the retail seller for
each compliance period. These quantities shall be established in the
same manner for all retail sellers and result in the same percentages
used to establish compliance period quantities for all retail
sellers.
(B) In establishing quantities for the compliance period from
January 1, 2011, to December 31, 2013, inclusive, the commission
shall require procurement for each retail seller equal to an average
of 20 percent of retail sales. For the following compliance periods,
the quantities shall reflect reasonable progress in each of the
intervening years sufficient to ensure that the procurement of
electricity products from eligible renewable energy resources
achieves 25 percent of retail sales by December 31, 2016, 33 percent
by December 31, 2020, 40 percent by December 31, 2024, 45 percent by
December 31, 2027, and 50 percent by December 31, 2030. The
commission shall establish appropriate three-year compliance periods
for all subsequent years that require retail sellers to procure not
less than 50 percent of retail sales of electricity products from
eligible renewable energy resources.
(C) Retail sellers shall be obligated to procure no less than the
quantities associated with all intervening years by the end of each
compliance period. Retail sellers shall not be required to
demonstrate a specific quantity of procurement for any individual
intervening year.
(3) The commission may require the procurement of eligible
renewable energy resources in excess of the quantities specified in
paragraph (2).
(4) Only for purposes of establishing the renewables portfolio
standard procurement requirements of paragraph (1) and determining
the quantities pursuant to paragraph (2), the commission shall
include all electricity sold to retail customers by the Department of
Water Resources pursuant to Division 27 (commencing with Section
80000) of the Water Code in the calculation of retail sales by an
electrical corporation.
(5) The commission shall waive enforcement of this section if it
finds that the retail seller has demonstrated any of the following
conditions are beyond the control of the retail seller and will
prevent compliance:
(A) There is inadequate transmission capacity to allow for
sufficient electricity to be delivered from proposed eligible
renewable energy resource projects using the current operational
protocols of the Independent System Operator. In making its findings
relative to the existence of this condition with respect to a retail
seller that owns transmission lines, the commission shall consider
both of the following:
(i) Whether the retail seller has undertaken, in a timely fashion,
reasonable measures under its control and consistent with its
obligations under local, state, and federal laws and regulations, to
develop and construct new transmission lines or upgrades to existing
lines intended to transmit electricity generated by eligible
renewable energy resources. In determining the reasonableness of a
retail seller's actions, the commission shall consider the retail
seller's expectations for full-cost recovery for these transmission
lines and upgrades.
(ii) Whether the retail seller has taken all reasonable
operational measures to maximize cost-effective deliveries of
electricity from eligible renewable energy resources in advance of
transmission availability.
(B) Permitting, interconnection, or other circumstances that delay
procured eligible renewable energy resource projects, or there is an
insufficient supply of eligible renewable energy resources available
to the retail seller. In making a finding that this condition
prevents timely compliance, the commission shall consider whether the
retail seller has done all of the following:
(i) Prudently managed portfolio risks, including relying on a
sufficient number of viable projects.
(ii) Sought to develop one of the following: its own eligible
renewable energy resources, transmission to interconnect to eligible
renewable energy resources, or energy storage used to integrate
eligible renewable energy resources. This clause shall not require an
electrical corporation to pursue development of eligible renewable
energy resources pursuant to Section 399.14.
(iii) Procured an appropriate minimum margin of procurement above
the minimum procurement level necessary to comply with the renewables
portfolio standard to compensate for foreseeable delays or
insufficient supply.
(iv) Taken reasonable measures, under the control of the retail
seller, to procure cost-effective distributed generation and
allowable unbundled renewable energy credits.
(C) Unanticipated curtailment of eligible renewable energy
resources if the waiver would not result in an increase in greenhouse
gas emissions.
(D) Unanticipated increase in retail sales due to transportation
electrification. In making a finding that this condition prevents
timely compliance, the commission shall consider all of the
following:
(i) Whether transportation electrification significantly exceeded
forecasts in that retail seller's service territory based on the best
and most recently available information filed with the State Air
Resources Board, the Energy Commission, or other state agency.
(ii) Whether the retail seller has taken reasonable measures to
procure sufficient resources to account for unanticipated increases
in retail sales due to transportation electrification.
(6) If the commission waives the compliance requirements of this
section, the commission shall establish additional reporting
requirements on the retail seller to demonstrate that all reasonable
actions under the control of the retail seller are taken in each of
the intervening years sufficient to satisfy future procurement
requirements.
(7) The commission shall not waive enforcement pursuant to this
section, unless the retail seller demonstrates that it has taken all
reasonable actions under its control, as set forth in paragraph (5),
to achieve full compliance.
(8) If a retail seller fails to procure sufficient eligible
renewable energy resources to comply with a procurement requirement
pursuant to paragraphs (1) and (2) and fails to obtain an order from
the commission waiving enforcement pursuant to paragraph (5), the
commission shall assess penalties for noncompliance. A schedule of
penalties shall be adopted by the commission that shall be comparable
for electrical corporations and other retail sellers. For electrical
corporations, the cost of any penalties shall not be collected in
rates. Any penalties collected under this article shall be deposited
into the Electric Program Investment Charge Fund and used for the
purposes described in Chapter 8.1 (commencing with Section 25710) of
Division 15 of the Public Resources Code.
(9) Deficits associated with the compliance period shall not be
added to a future compliance period.
(c) The commission shall establish a limitation for each
electrical corporation on the procurement expenditures for all
eligible renewable energy resources used to comply with the
renewables portfolio standard. This limitation shall be set at a
level that prevents disproportionate rate impacts.
(d) If the cost limitation for an electrical corporation is
insufficient to support the projected costs of meeting the renewables
portfolio standard procurement requirements, the electrical
corporation may refrain from entering into new contracts or
constructing facilities beyond the quantity that can be procured
within the limitation, unless eligible renewable energy resources can
be procured without exceeding a de minimis increase in rates,
consistent with the long-term procurement plan established for the
electrical corporation pursuant to Section 454.5.
(e) (1) The commission shall monitor the status of the cost
limitation for each electrical corporation in order to ensure
compliance with this article.
(2) If the commission determines that an electrical corporation
may exceed its cost limitation prior to achieving the renewables
portfolio standard procurement requirements, the commission shall do
both of the following within 60 days of making that determination:
(A) Investigate and identify the reasons why the electrical
corporation may exceed its annual cost limitation.
(B) Notify the appropriate policy and fiscal committees of the
Legislature that the electrical corporation may exceed its cost
limitation, and include the reasons why the electrical corporation
may exceed its cost limitation.
(f) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
SEC. 21. Section 399.16 of the Public Utilities Code is amended to
read:
399.16. (a) Various electricity products from eligible renewable
energy resources located within the WECC transmission network service
area shall be eligible to comply with the renewables portfolio
standard procurement requirements in Section 399.15. These
electricity products may be differentiated by their impacts on the
operation of the grid in supplying electricity, as well as meeting
the requirements of this article.
(b) Consistent with the goals of
procuring the least-cost and best-fit electricity products from
eligible renewable energy resources that meet project viability
principles adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 399.13 and that provide the benefits set
forth in Section 399.11, a balanced portfolio of eligible renewable
energy resources shall be procured consisting of the following
portfolio content categories:
(1) Eligible renewable energy resource electricity products that
meet either of the following criteria:
(A) Have a first point of interconnection with a California
balancing authority, have a first point of interconnection with
distribution facilities used to serve end users within a California
balancing authority area, or are scheduled from the eligible
renewable energy resource into a California balancing authority
without substituting electricity from another source. The use of
another source to provide real-time ancillary services required to
maintain an hourly or subhourly import schedule into a California
balancing authority shall be permitted, but only the fraction of the
schedule actually generated by the eligible renewable energy resource
shall count toward this portfolio content category.
(B) Have an agreement to dynamically transfer electricity to a
California balancing authority.
(2) Firmed and shaped eligible renewable energy resource
electricity products providing incremental electricity and scheduled
into a California balancing authority.
(3) Eligible renewable energy resource electricity products, or
any fraction of the electricity generated, including unbundled
renewable energy credits, that do not qualify under the criteria of
paragraph (1) or (2).
(c) In order to achieve a balanced portfolio, all retail sellers
shall meet the following requirements for all procurement credited
toward each compliance period:
(1) Not less than 50 percent for the compliance period ending
December 31, 2013, 65 percent for the compliance period ending
December 31, 2016, and 75 percent for each compliance period
thereafter, of the eligible renewable energy resource electricity
products associated with contracts executed after June 1, 2010, shall
meet the product content requirements of paragraph (1) of
subdivision (b).
(2) Not more than 25 percent for the compliance period ending
December 31, 2013, 15 percent for the compliance period ending
December 31, 2016, and 10 percent for each compliance period
thereafter, of the eligible renewable energy resource electricity
products associated with contracts executed after June 1, 2010, shall
meet the product content requirements of paragraph (3) of
subdivision (b).
(3) Any renewable energy resources contracts executed on or after
June 1, 2010, not subject to the limitations of paragraph (1) or (2),
shall meet the product content requirements of paragraph (2) of
subdivision (b).
(4) For purposes of electric service providers only, the
restrictions in this subdivision on crediting eligible renewable
energy resource electricity products to each compliance period shall
apply to contracts executed after January 13, 2011.
(d) Any contract or ownership agreement originally executed prior
to June 1, 2010, shall count in full toward the procurement
requirements established pursuant to this article, if all of the
following conditions are met:
(1) The renewable energy resource was eligible under the rules in
place as of the date when the contract was executed.
(2) For an electrical corporation, the contract has been approved
by the commission, even if that approval occurs after June 1, 2010.
(3) Any contract amendments or modifications occurring after June
1, 2010, do not increase the nameplate capacity or expected
quantities of annual generation, or substitute a different renewable
energy resource. The duration of the contract may be extended if the
original contract specified a procurement commitment of 15 or more
years.
(e) A retail seller may apply to the commission for a reduction of
a procurement content requirement of subdivision (c). The commission
may reduce a procurement content requirement of subdivision (c) to
the extent the retail seller demonstrates that it cannot comply with
that subdivision because of conditions beyond the control of the
retail seller as provided in paragraph (5) of subdivision (b) of
Section 399.15. The commission shall not, under any circumstance,
reduce the obligation specified in paragraph (1) of subdivision (c)
below 65 percent for any compliance period obligation after December
31, 2016.
SEC. 22. Section 399.18 of the Public Utilities Code is amended to
read:
399.18. (a) This section applies to an electrical corporation
that as of January 1, 2010, met either of the following conditions:
(1) Served 30,000 or fewer customer accounts in California and had
issued at least four solicitations for eligible renewable energy
resources prior to June 1, 2010.
(2) Had 1,000 or fewer customer accounts in California and was not
connected to any transmission system or to the Independent System
Operator.
(b) For an electrical corporation or its successor, electricity
products from eligible renewable energy resources may be used for
compliance with this article, notwithstanding any procurement content
limitation in Section 399.16, provided that all of the following
conditions are met:
(1) The electrical corporation or its successor participates in,
and complies with, the accounting system administered by the Energy
Commission pursuant to subdivision (b) of Section 399.25.
(2) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the requirements of Section
399.15.
(3) The electrical corporation continues to satisfy either of the
conditions described in subdivision (a).
SEC. 23. Section 399.21 of the Public Utilities Code is amended to
read:
399.21. (a) The commission, by rule, shall authorize the use of
renewable energy credits to satisfy the renewables portfolio standard
procurement requirements established pursuant to this article,
subject to the following conditions:
(1) The commission and the Energy Commission shall ensure that the
tracking system established pursuant to subdivision (c) of Section
399.25, is operational, is capable of independently verifying that
electricity earning the credit is generated by an eligible renewable
energy resource, and can ensure that renewable energy credits shall
not be double counted by any seller of electricity within the service
territory of the WECC.
(2) Each renewable energy credit shall be counted only once for
compliance with the renewables portfolio standard of this state or
any other state, or for verifying retail product claims in this state
or any other state.
(3) All revenues received by an electrical corporation for the
sale of a renewable energy credit shall be credited to the benefit of
ratepayers.
(4) Renewable energy credits shall not be created for electricity
generated pursuant to any electricity purchase contract with a retail
seller or a local publicly owned electric utility executed before
January 1, 2005, unless the contract contains explicit terms and
conditions specifying the ownership or disposition of those credits.
Procurement under those contracts shall be tracked through the
accounting system described in subdivision (b) of Section 399.25 and
included in the quantity of eligible renewable energy resources of
the purchasing retail seller pursuant to Section 399.15.
(5) Renewable energy credits shall not be created for electricity
generated under any electricity purchase contract executed after
January 1, 2005, pursuant to the federal Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.). Procurement under
the electricity purchase contracts shall be tracked through the
accounting system implemented by the Energy Commission pursuant to
subdivision (b) of Section 399.25 and count toward the renewables
portfolio standard procurement requirements of the purchasing retail
seller.
(6) Nothing in the amendments to this article made by the Clean
Energy and Pollution Reduction Act of 2015 (Senate Bill 350 of the
2015-16 Regular Session) is intended to change commission Decision
11-12-052 regarding the classification of renewable energy credits
from generation on the customer side of the meter.
(7) A renewable energy credit shall not be eligible for compliance
with a renewables portfolio standard procurement requirement unless
it is retired in the tracking system established pursuant to
subdivision (c) of Section 399.25 by the retail seller or local
publicly owned electric utility within 36 months from the initial
date of generation of the associated electricity.
(b) The commission shall allow an electrical corporation to
recover the reasonable costs of purchasing, selling, and
administering renewable energy credit contracts in rates.
SEC. 24. Section 399.30 of the Public Utilities Code is amended to
read:
399.30. (a) (1) To fulfill unmet long-term generation resource
needs, each local publicly owned electric utility shall adopt and
implement a renewable energy resources procurement plan that requires
the utility to procure a minimum quantity of electricity products
from eligible renewable energy resources, including renewable energy
credits, as a specified percentage of total kilowatthours sold to the
utility's retail end-use customers, each compliance period, to
achieve the targets of subdivision (c).
(2) Beginning January 1, 2019, a local publicly owned electric
utility subject to Section 9621 shall incorporate the renewable
energy resources procurement plan required by this section as part of
a broader integrated resource plan developed and adopted pursuant to
Section 9621.
(b) The governing board shall implement procurement targets for a
local publicly owned electric utility that require the utility to
procure a minimum quantity of eligible renewable energy resources for
each of the following compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(4) January 1, 2021, to December 31, 2024, inclusive.
(5) January 1, 2025, to December 31, 2027, inclusive.
(6) January 1, 2028, to December 31, 2030, inclusive.
(c) The governing board of a local publicly owned electric utility
shall ensure all of the following:
(1) The quantities of eligible renewable energy resources to be
procured for the compliance period from January 1, 2011, to December
31, 2013, inclusive, are equal to an average of 20 percent of retail
sales.
(2) The quantities of eligible renewable energy resources to be
procured for all other compliance periods reflect reasonable progress
in each of the intervening years sufficient to ensure that the
procurement of electricity products from eligible renewable energy
resources achieves 25 percent of retail sales by December 31, 2016,
33 percent by December 31, 2020, 40 percent by December 31, 2024, 45
percent by December 31, 2027, and 50 percent by December 31, 2030.
The Energy Commission shall establish appropriate multiyear
compliance periods for all subsequent years that require the local
publicly owned electric utility to procure not less than 50 percent
of retail sales of electricity products from eligible renewable
energy resources.
(3) A local publicly owned electric utility shall adopt
procurement requirements consistent with Section 399.16.
(4) Beginning January 1, 2014, in calculating the procurement
requirements under this article, a local publicly owned electric
utility may exclude from its total retail sales the kilowatthours
generated by an eligible renewable energy resource that is credited
to a participating customer pursuant to a voluntary green pricing or
shared renewable generation program. Any exclusion shall be limited
to electricity products that do not meet the portfolio content
criteria set forth in paragraph (2) or (3) of subdivision (b) of
Section 399.16. Any renewable energy credits associated with
electricity credited to a participating customer shall not be used
for compliance with procurement requirements under this article,
shall be retired on behalf of the participating customer, and shall
not be further sold, transferred, or otherwise monetized for any
purpose. To the extent possible for generation that is excluded from
retail sales under this subdivision, a local publicly owned electric
utility shall seek to procure those eligible renewable energy
resources that are located in reasonable proximity to program
participants.
(d) (1) The governing board of a local publicly owned electric
utility shall adopt procurement requirements consistent with
subparagraph (B) of paragraph (4) of subdivision (a) of, and
subdivision (b) of, Section 399.13.
(2) The governing board of a local publicly owned electric utility
may adopt the following measures:
(A) Conditions that allow for delaying timely compliance
consistent with subdivision (b) of Section 399.15.
(B) Cost limitations for procurement expenditures consistent with
subdivision (c) of Section 399.15.
(e) The governing board of the local publicly owned electric
utility shall adopt a program for the enforcement of this article.
The program shall be adopted at a publicly noticed meeting offering
all interested parties an opportunity to comment. Not less than 30
days' notice shall be given to the public of any meeting held for
purposes of adopting the program. Not less than 10 days' notice shall
be given to the public before any meeting is held to make a
substantive change to the program.
(f) (1) Each local publicly owned electric utility shall annually
post notice, in accordance with Chapter 9 (commencing with Section
54950) of Part 1 of Division 2 of Title 5 of the Government Code,
whenever its governing body will deliberate in public on its
renewable energy resources procurement plan.
(2) Contemporaneous with the posting of the notice of a public
meeting to consider the renewable energy resources procurement plan,
the local publicly owned electric utility shall notify the Energy
Commission of the date, time, and location of the meeting in order to
enable the Energy Commission to post the information on its Internet
Web site. This requirement is satisfied if the local publicly owned
electric utility provides the uniform resource locator (URL) that
links to this information.
(3) Upon distribution to its governing body of information related
to its renewable energy resources procurement status and future
plans, for its consideration at a noticed public meeting, the local
publicly owned electric utility shall make that information available
to the public and shall provide the Energy Commission with an
electronic copy of the documents for posting on the Energy Commission'
s Internet Web site. This requirement is satisfied if the local
publicly owned electric utility provides the uniform resource locator
(URL) that links to the documents or information regarding other
manners of access to the documents.
(g) A public utility district that receives all of its electricity
pursuant to a preference right adopted and authorized by the United
States Congress pursuant to Section 4 of the Trinity River Division
Act of August 12, 1955 (Public Law 84-386) shall be in compliance
with the renewable energy procurement requirements of this article.
(h) For a local publicly owned electric utility that was in
existence on or before January 1, 2009, that provides retail electric
service to 15,000 or fewer customer accounts in California, and is
interconnected to a balancing authority located outside this state
but within the WECC, an eligible renewable energy resource includes a
facility that is located outside California that is connected to the
WECC transmission system, if all of the following conditions are
met:
(1) The electricity generated by the facility is procured by the
local publicly owned electric utility, is delivered to the balancing
authority area in which the local publicly owned electric utility is
located, and is not used to fulfill renewable energy procurement
requirements of other states.
(2) The local publicly owned electric utility participates in, and
complies with, the accounting system administered by the Energy
Commission pursuant to this article.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the renewables portfolio standard
procurement requirements.
(i) Notwithstanding subdivision (a), for a local publicly owned
electric utility that is a joint powers authority of districts
established pursuant to state law on or before January 1, 2005, that
furnish electric services other than to residential customers, and is
formed pursuant to the Irrigation District Law (Division 11
(commencing with Section 20500) of the Water Code), the percentage of
total kilowatthours sold to the district's retail end-use customers,
upon which the renewables portfolio standard procurement
requirements in subdivision (b) are calculated, shall be based on the
authority's average retail sales over the previous seven years. If
the authority has not furnished electric service for seven years,
then the calculation shall be based on average retail sales over the
number of completed years during which the authority has provided
electric service.
(j) A local publicly owned electric utility in a city and county
that only receives greater than 67 percent of its electricity sources
from hydroelectric generation located within the state that it owns
and operates, and that does not meet the definition of a "renewable
electrical generation facility" pursuant to Section 25741 of the
Public Resources Code, shall be required to procure eligible
renewable energy resources, including renewable energy credits, to
meet only the electricity demands unsatisfied by its hydroelectric
generation in any given year, in order to satisfy its renewable
energy procurement requirements.
(k) (1) A local publicly owned electric utility that receives
greater than 50 percent of its annual retail sales from its own
hydroelectric generation that is not an eligible renewable energy
resource shall not be required to procure additional eligible
renewable energy resources in excess of either of the following:
(A) The portion of its retail sales not supplied by its own
hydroelectric generation. For these purposes, retail sales supplied
by an increase in hydroelectric generation resulting from an increase
in the amount of water stored by a dam because the dam is enlarged
or otherwise modified after December 31, 2012, shall not count as
being retail sales supplied by the utility's own hydroelectric
generation.
(B) The cost limitation adopted pursuant to this section.
(2) For the purposes of this subdivision, "hydroelectric
generation" means electricity generated from a hydroelectric facility
that satisfies all of the following:
(A) Is owned solely and operated by the local publicly owned
electric utility as of 1967.
(B) Serves a local publicly owned electric utility with a
distribution system demand of less than 150 megawatts.
(C) Involves a contract in which an electrical corporation
receives the benefit of the electric generation through June of 2014,
at which time the benefit reverts back to the ownership and control
of the local publicly owned electric utility.
(D) Has a maximum penstock flow capacity of no more than 3,200
cubic feet per second and includes a regulating reservoir with a
small hydroelectric generation facility producing fewer than 20
megawatts with a maximum penstock flow capacity of no more than 3,000
cubic feet per second.
(3) This subdivision does not reduce or eliminate any renewable
procurement requirement for any compliance period ending prior to
January 1, 2014.
(4) This subdivision does not require a local publicly owned
electric utility to purchase additional eligible renewable energy
resources in excess of the procurement requirements of subdivision
(c).
(l) (1) (A) For purposes of this subdivision, "large hydroelectric
generation" means electricity generated from a hydroelectric
facility that is not an eligible renewable energy resource and
provides electricity to a local publicly owned electric utility from
facilities owned by the federal government as a part of the federal
Central Valley Project or a joint powers agency formed and created
pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of
Title 1 of the Government Code.
(B) Large hydroelectric generation does not include any resource
that meets the definition of hydroelectric generation set forth in
subdivision (k).
(2) If, during a year within a compliance period set forth in
subdivision (b), a local publicly owned electric utility receives
greater than 50 percent of its retail sales from large hydroelectric
generation, it is not required to procure eligible renewable energy
resources that exceed the lesser of the following for that year:
(A) The portion of the local publicly owned electric utility
retail sales unsatisfied by the local publicly owned electric utility'
s large hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the
intervening year of the relevant compliance period.
(3) Except for an existing agreement effective as of January 1,
2015, or extension or renewal of that agreement, any new procurement
commitment shall not be eligible to count towards the determination
that the local publicly owned electric utility receives more than 50
percent of its retail sales from large hydroelectric generation in
any year.
(4) The Energy Commission shall adjust the total quantities of
eligible renewable energy resources to be procured by a local
publicly owned electric utility for a compliance period to reflect
any reductions required pursuant to paragraph (2).
(5) This subdivision does not modify the compliance obligation of
a local publicly owned electric utility to satisfy the requirements
of subdivision (c) of Section 399.16.
(m) (1) (A) For purposes of this subdivision, "unavoidable
long-term contracts and ownership agreements" means commitments for
electricity from a coal-fired powerplant, located outside the state,
originally entered into by a local publicly owned electric utility
before June 1, 2010, that is not subsequently modified to result in
an extension of the duration of the agreement or result in an
increase in total quantities of energy delivered during any
compliance period set forth in subdivision (b).
(B) The governing board of a local publicly owned electric utility
shall demonstrate in its renewable energy resources procurement plan
required pursuant to subdivision (f) that any cancellation or
divestment of the commitment would result in significant economic
harm to its retail customers that cannot be substantially mitigated
through resale, transfer to another entity, early closure of the
facility, or other feasible measures.
(2) For the compliance period set forth in paragraph (4) of
subdivision (b), a local publicly owned electric utility meeting the
requirement of subparagraph (B) of paragraph (1) may adjust its
renewable energy procurement targets to ensure that the procurement
of additional electricity from eligible renewable energy resources,
in combination with the procurement of electricity from unavoidable
long-term contracts and ownership agreements, does not exceed the
total retail sales of the local publicly owned electric utility
during that compliance period. The local publicly owned electric
utility may limit its procurement of eligible renewable energy
resources for that compliance period to no less than an average of 33
percent of its retail sales.
(3) The Energy Commission shall approve any reductions in
procurement targets proposed by a local publicly owned electric
utility if it determines that the requirements of this subdivision
are satisfied.
(n) A local publicly owned electric utility shall retain
discretion over both of the following:
(1) The mix of eligible renewable energy resources procured by the
utility and those additional generation resources procured by the
utility for purposes of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible
renewable energy resources owned by the utility.
(o) The Energy Commission shall adopt regulations specifying
procedures for enforcement of this article. The regulations shall
include a public process under which the Energy Commission may issue
a notice of violation and correction against a local publicly owned
electric utility for failure to comply with this article, and for
referral of violations to the State Air Resources Board for penalties
pursuant to subdivision (n).
(p) (1) Upon a determination by the Energy Commission that a local
publicly owned electric utility has failed to comply with this
article, the Energy Commission shall refer the failure to comply with
this article to the State Air Resources Board, which may impose
penalties to enforce this article consistent with Part 6 (commencing
with Section 38580) of Division 25.5 of the Health and Safety Code.
Any penalties imposed shall be comparable to those adopted by the
commission for noncompliance by retail sellers.
(2) Any penalties collected by the State Air Resources Board
pursuant to this article shall be deposited in the Air Pollution
Control Fund and, upon appropriation by the Legislature, shall be
expended for reducing emissions of air pollution or greenhouse gases
within the same geographic area as the local publicly owned electric
utility.
SEC. 25. Article 17 (commencing with Section 400) is added to
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to
read:
Article 17. Clean Energy and Pollution Reduction
400. The commission and the Energy Commission shall do all of the
following in furtherance of meeting the state's clean energy and
pollution reduction objectives:
(a) Take into account the use of distributed generation to the
extent that it provides economic and environmental benefits in
disadvantaged communities as identified pursuant to Section 39711 of
the Health and Safety Code.
(b) Take into account the opportunities to decrease costs and
increase benefits, including pollution reduction and grid
integration, using renewable and nonrenewable technologies with zero
or lowest feasible emissions of greenhouse gases, criteria
pollutants, and toxic air contaminants onsite in proceedings
associated with meeting
the objectives.
(c) Where feasible, authorize procurement of resources to provide
grid reliability services that minimize reliance on system power and
fossil fuel resources and, where feasible, cost effective, and
consistent with other state policy objectives, increase the use of
large- and small-scale energy storage with a variety of technologies,
targeted energy efficiency, demand response, including, but not
limited to, automated demand response, eligible renewable energy
resources, or other renewable and nonrenewable technologies with zero
or lowest feasible emissions of greenhouse gases, criteria
pollutants, and toxic air contaminants onsite to protect system
reliability.
(d) Review technology incentive, research, development,
deployment, and market facilitation programs overseen by the
commission and the Energy Commission and make recommendations to
advance state clean energy and pollution reduction objectives and
provide benefits to disadvantaged communities as identified pursuant
to Section 39711 of the Health and Safety Code.
(e) To the extent feasible, give first priority to the manufacture
and deployment of clean energy and pollution reduction technologies
that create employment opportunities, including high wage, highly
skilled employment opportunities, and increased investment in the
state.
(f) Establish a publicly available tracking system to provide
up-to-date information on progress toward meeting the clean energy
and pollution reduction goals of the Clean Energy and Pollution
Reduction Act of 2015.
(g) Establish an advisory group consisting of representatives from
disadvantaged communities identified in Section 39711 of the Health
and Safety Code. The advisory group shall review and provide advice
on programs proposed to achieve clean energy and pollution reduction
and determine whether those proposed programs will be effective and
useful in disadvantaged communities.
SEC. 26. Section 454.51 is added to the Public Utilities Code, to
read:
454.51. The commission shall do all of the following:
(a) Identify a diverse and balanced portfolio of resources needed
to ensure a reliable electricity supply that provides optimal
integration of renewable energy in a cost-effective manner. The
portfolio shall rely upon zero carbon-emitting resources to the
maximum extent reasonable and be designed to achieve any statewide
greenhouse gas emissions limit established pursuant to the California
Global Warming Solutions Act of 2006 (Division 25.5 (commencing with
Section 38500) of the Health and Safety Code) or any successor
legislation.
(b) Direct each electrical corporation to include, as part of its
proposed procurement plan, a strategy for procuring best-fit and
least-cost resources to satisfy the portfolio needs identified by the
commission pursuant to subdivision (a).
(c) Ensure that the net costs of any incremental renewable energy
integration resources procured by an electrical corporation to
satisfy the need identified in subdivision (a) are allocated on a
fully nonbypassable basis consistent with the treatment of costs
identified in paragraph (2) of subdivision (c) of Section 365.1.
(d) Permit community choice aggregators to submit proposals for
satisfying their portion of the renewable integration need identified
in subdivision (a). If the commission finds this need is best met
through long-term procurement commitments for resources, community
choice aggregators shall also be required to make long-term
commitments for resources. The commission shall approve proposals
pursuant to this subdivision if it finds all of the following:
(1) The resources proposed by a community choice aggregator will
provide equivalent integration of renewable energy.
(2) The resources proposed by a community choice aggregator will
promote the efficient achievement of state energy policy objectives,
including reductions in greenhouse gas emissions.
(3) Bundled customers of an electrical corporation will be
indifferent from the approval of the community choice aggregator
proposals.
(4) All costs resulting from nonperformance will be borne by the
electrical corporation or community choice aggregator responsible for
them.
SEC. 27. Section 454.52 is added to the Public Utilities Code, to
read:
454.52. (a) (1) Commencing in 2017, and to be updated regularly
thereafter, the commission shall adopt a process for each
load-serving entity, as defined in Section 380, to file an integrated
resource plan, and a schedule for periodic updates to the plan, to
ensure that load-serving entities do the following:
(A) Meet the greenhouse gas emissions reduction targets
established by the State Air Resources Board, in coordination with
the commission and the Energy Commission, for the electricity sector
and each load-serving entity that reflect the electricity sector's
percentage in achieving the economywide greenhouse gas emissions
reductions of 40 percent from 1990 levels by 2030.
(B) Procure at least 50 percent eligible renewable energy
resources by December 31, 2030, consistent with Article 16
(commencing with Section 399.11) of Chapter 2.3.
(C) Enable each electrical corporation to fulfill its obligation
to serve its customers at just and reasonable rates.
(D) Minimize impacts on ratepayers' bills.
(E) Ensure system and local reliability.
(F) Strengthen the diversity, sustainability, and resilience of
the bulk transmission and distribution systems, and local
communities.
(G) Enhance distribution systems and demand-side energy
management.
(H) Minimize localized air pollutants and other greenhouse gas
emissions, with early priority on disadvantaged communities
identified pursuant to Section 39711 of the Health and Safety Code.
(2) (A) The commission may authorize all source procurement for
electrical corporations that includes various resource types
including demand-side resources, supply side resources, and resources
that may be either demand-side resources or supply side resources,
taking into account the differing electrical corporations' geographic
service areas, to ensure that each load-serving entity meets the
goals set forth in paragraph (1).
(B) The commission may approve procurement of resource types that
will reduce overall greenhouse gas emissions from the electricity
sector and meet the other goals specified in paragraph (1), but due
to the nature of the technology or fuel source may not compete
favorably in price against other resources over the time period of
the integrated resource plan.
(b) (1) Each load-serving entity shall prepare and file an
integrated resource plan consistent with paragraph (2) of subdivision
(a) on a time schedule directed by the commission and subject to
commission review.
(2) Each electrical corporation's plan shall follow the provisions
of Section 454.5.
(3) The plan of a community choice aggregator shall be submitted
to its governing board for approval and provided to the commission
for certification, consistent with paragraph (5) of subdivision (a)
of Section 366.2, and shall achieve the following:
(A) Economic, reliability, environmental, security, and other
benefits and performance characteristics that are consistent with the
goals set forth in paragraph (1) of subdivision (a).
(B) A diversified procurement portfolio consisting of both
short-term and long-term electricity and electricity-related and
demand reduction products.
(C) The resource adequacy requirements established pursuant to
Section 380.
(4) The plan of an electric service provider shall achieve the
goals set forth in paragraph (1) of subdivision (a) through a
diversified portfolio consisting of both short-term and long-term
electricity, electricity-related, and demand reduction products.
(c) To the extent that additional procurement is authorized for
the electrical corporation in the integrated resource plan or the
procurement process authorized pursuant to Section 454.5, the
commission shall ensure that the costs are allocated in a fair and
equitable manner to all customers consistent with 454.51, that there
is no cost-shifting among customers of load-serving entities, and
that community choice aggregators may self-provide renewable
integration resources consistent with Section 454.51.
(d) In order to eliminate redundancy and increase efficiency, the
process adopted pursuant to subdivision (a) shall incorporate, and
not duplicate, any other planning processes of the commission.
SEC. 28. Section 454.55 of the Public Utilities Code is amended to
read:
454.55. (a) The commission, in consultation with the Energy
Commission, shall identify all potentially achievable cost-effective
electricity efficiency savings and establish efficiency targets for
an electrical corporation to achieve, pursuant to Section 454.5,
consistent with the targets established pursuant to subdivision (c)
of Section 25310 of the Public Resources Code.
(1) By July 1, 2018, and every four years thereafter, each
electrical corporation shall report on its progress toward achieving
the targets established pursuant to subdivision (a).
(2) By July 1, 2019, and every four years thereafter, the
commission shall, pursuant to Section 9795 of the Government Code,
report to the Legislature on the progress toward achieving the
targets established pursuant to subdivision (a). The commission shall
include specific strategies for, and an update on, progress toward
maximizing the contribution of electricity efficiency savings in
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code.
(b) (1) By December 31, 2023, the commission shall, in a new or
existing proceeding, undertake a comprehensive review of the
feasibility, costs, barriers, and benefits of achieving a cumulative
doubling of energy efficiency savings and demand reduction by 2030
pursuant to subdivision (c) of Section 25310 of the Public Resources
Code.
(2) Notwithstanding subdivision (c) of Section 25310 of the Public
Resources Code, if the commission concludes the targets established
for electrical corporations to achieve pursuant to subdivision (a)
are not cost effective, feasible, or pose potential adverse impacts
to public health and safety, the commission shall revise the targets
to the level that optimizes the amount of energy efficiency savings
and demand reduction and shall modify, revise, or update its policies
as needed to address barriers preventing achievement of those
targets.
SEC. 29. Section 454.56 of the Public Utilities Code is amended to
read:
454.56. (a) The commission, in consultation with the Energy
Commission, shall identify all potentially achievable cost-effective
natural gas efficiency savings and establish efficiency targets for
the gas corporation to achieve, consistent with the targets
established pursuant to subdivision (c) of Section 25310 of the
Public Resources Code.
(b) A gas corporation shall first meet its unmet resource needs
through all available natural gas efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
(c) By July 1, 2018, and every four years thereafter, each gas
corporation shall report on its progress toward achieving the targets
established pursuant to subdivision (a).
(d) By July 1, 2019, and every four years thereafter, the
commission shall, pursuant to Section 9795 of the Government Code,
report to the Legislature on the progress toward achieving the
targets establish pursuant to subdivision (a). The commission shall
include specific strategies for, and an update on, progress toward
maximizing the contribution of energy efficiency savings in
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code.
(e) Notwithstanding subdivision (c) of Section 25310 of the Public
Resources Code, if the commission concludes in its review pursuant
to paragraph (1) of subdivision (b) of Section 454.55 that the
targets established for gas corporations to achieve pursuant to
subdivision (a) are not cost effective, feasible, or pose potential
adverse impacts to public health and safety, the commission shall
revise the targets to the level that maximizes the amount of energy
efficiency savings and demand reduction and shall modify, revise, or
update its policies as needed to address barriers preventing
achievement of those targets.
SEC. 30. Section 701.1 of the Public Utilities Code is amended to
read:
701.1. (a) (1) The Legislature finds and declares that, in
addition to other ratepayer protection objectives, a principal goal
of electric and natural gas utilities' resource planning and
investment shall be to minimize the cost to society of the reliable
energy services that are provided by natural gas and electricity, and
to improve the environment and to encourage the diversity of energy
sources through improvements in energy efficiency, development of
renewable energy resources, such as wind, solar, biomass, and
geothermal energy, and widespread transportation electrification.
(2) The amendment made to this subdivision by the Clean Energy and
Pollution Reduction Act of 2015 does not expand the authority of the
commission beyond that provided by other law.
(b) The Legislature further finds and declares that, in addition
to any appropriate investments in energy production, electrical and
natural gas utilities should seek to exploit all practicable and
cost-effective conservation and improvements in the efficiency of
energy use and distribution that offer equivalent or better system
reliability, and which are not being exploited by any other entity.
(c) In calculating the cost-effectiveness of energy resources,
including conservation and load management options, the commission
shall include, in addition to other ratepayer protection objectives,
a value for any costs and benefits to the environment, including air
quality. The commission shall ensure that any values it develops
pursuant to this section are consistent with values developed by the
State Energy Resources Conservation and Development Commission
pursuant to Section 25000.1 of the Public Resources Code. However, if
the commission determines that a value developed pursuant to this
subdivision is not consistent with a value developed by the State
Energy Resources Conservation and Development Commission pursuant to
subdivision (c) of Section 25000.1 of the Public Resources Code, the
commission may nonetheless use this value if, in the appropriate
record of its proceedings, it states its reasons for using the value
it has selected.
(d) In determining the emission values associated with the current
operating capacity of existing electric powerplants pursuant to
subdivision (c), the commission shall adhere to the following
protocol in determining values for air quality costs and benefits to
the environment. If the commission finds that an air pollutant that
is subject to regulation is a component of residual emissions from an
electric powerplant and that the owner of that powerplant is either
of the following:
(1) Using a tradable emission allowance, right, or offset for that
pollutant, which (A) has been approved by the air quality district
regulating the powerplant, (B) is consistent with federal and state
law, and (C) has been obtained, authorized, or acquired in a
market-based system.
(2) Paying a tax per measured unit of that pollutant.
The commission shall not assign a value or cost to that residual
pollutant for the current operating capacity of that powerplant
because the alternative protocol for dealing with the pollutant
operates to internalize its cost for the purpose of planning for and
acquiring new generating resources.
(e) (1) The values determined pursuant to subdivision (c) to
represent costs and benefits to the environment shall not be used by
the commission, in and of themselves, to require early
decommissioning or retirement of an electric utility powerplant that
complies with applicable prevailing environmental regulations.
(2) Further, the environmental values determined pursuant to
subdivision (c) shall not be used by the commission in a manner
which, when those values are aggregated, will result in advancing an
electric utility's need for new powerplant capacity by more than 15
months.
(f) This subdivision shall apply whenever a powerplant bid
solicitation is required by the commission for an electric utility
and a portion of the amount of new powerplant capacity, which is the
subject of the bid solicitation, is the result of the commission's
use of environmental values to advance that electric utility's need
for new powerplant capacity in the manner authorized by paragraph (2)
of subdivision (e). The affected electric utility may propose to the
commission any combination of alternatives to that portion of the
new powerplant capacity that is the result of the commission's use of
environmental values as authorized by paragraph (2) of subdivision
(c). The commission shall approve an alternative in place of the new
powerplant capacity if it finds all of the following:
(1) The alternative has been approved by the relevant air quality
district.
(2) The alternative is consistent with federal and state law.
(3) The alternative will result in needed system reliability for
the electric utility at least equivalent to that which would result
from bidding for new powerplant capacity.
(4) The alternative will result in reducing system operating costs
for the electric utility over those which would result from the
process of bidding for new powerplant capacity.
(5) The alternative will result in equivalent or better
environmental improvements at a lower cost than would result from
bidding for new powerplant capacity.
(g) This section does not require an electric utility to alter the
dispatch of its powerplants for environmental purposes.
(h) This section does not preclude an electric utility from
submitting to the commission any combination of alternatives to meet
a commission-identified need for new capacity, if the submission is
otherwise authorized by the commission.
(i) This section does not change or alter any provision of
commission decision 92-04-045, dated April 22, 1992.
SEC. 31. Section 740.8 of the Public Utilities Code is amended to
read:
740.8. As used in Section 740.3 or 740.12, "interests" of
ratepayers, short- or long-term, mean direct benefits that are
specific to ratepayers, consistent with both of the following:
(a) Safer, more reliable, or less costly gas or electrical
service, consistent with Section 451, including electrical service
that is safer, more reliable, or less costly due to either improved
use of the electric system or improved integration of renewable
energy generation.
(b) Any one of the following:
(1) Improvement in energy efficiency of travel.
(2) Reduction of health and environmental impacts from air
pollution.
(3) Reduction of greenhouse gas emissions related to electricity
and natural gas production and use.
(4) Increased use of alternative fuels.
(5) Creating high-quality jobs or other economic benefits,
including in disadvantaged communities identified pursuant to Section
39711 of the Health and Safety Code.
SEC. 32. Section 740.12 is added to the Public Utilities Code, to
read:
740.12. (a) (1) The Legislature finds and declares all of the
following:
(A) Advanced clean vehicles and fuels are needed to reduce
petroleum use, to meet air quality standards, to improve public
health, and to achieve greenhouse gas emissions reduction goals.
(B) Widespread transportation electrification is needed to achieve
the goals of the Charge Ahead California Initiative (Chapter 8.5
(commencing with Section 44258) of Part 5 of Division 26 of the
Health and Safety Code).
(C) Widespread transportation electrification requires increased
access for disadvantaged communities, low- and moderate-income
communities, and other consumers of zero-emission and
near-zero-emission vehicles, and increased use of those vehicles in
those communities and by other consumers to enhance air quality,
lower greenhouse gases emissions, and promote overall benefits to
those communities and other consumers.
(D) Reducing emissions of greenhouse gases to 40 percent below
1990 levels by 2030 and to 80 percent below 1990 levels by 2050 will
require widespread transportation electrification.
(E) Widespread transportation electrification requires electrical
corporations to increase access to the use of electricity as a
transportation fuel.
(F) Widespread transportation electrification should stimulate
innovation and competition, enable consumer options in charging
equipment and services, attract private capital investments, and
create high-quality jobs for Californians, where technologically
feasible.
(G) Deploying electric vehicles should assist in grid management,
integrating generation from eligible renewable energy resources, and
reducing fuel costs for vehicle drivers who charge in a manner
consistent with electrical grid conditions.
(H) Deploying electric vehicle charging infrastructure should
facilitate increased sales of electric vehicles by making charging
easily accessible and should provide the opportunity to access
electricity as a fuel that is cleaner and less costly than gasoline
or other fossil fuels in public and private locations.
(I) According to the State Alternative Fuels Plan analysis by the
Energy Commission and the State Air Resources Board, light-, medium-,
and heavy-duty vehicle electrification results in approximately 70
percent fewer greenhouse gases emitted, over 85 percent fewer
ozone-forming air pollutants emitted, and 100 percent fewer petroleum
used. These reductions will become larger as renewable generation
increases.
(2) It is the policy of the state and the intent of the
Legislature to encourage transportation electrification as a means to
achieve ambient air quality standards and the state's climate goals.
Agencies designing and implementing regulations, guidelines, plans,
and funding programs to reduce greenhouse gas emissions shall take
the findings described in paragraph (1) into account.
(b) The commission, in consultation with the State Air Resources
Board and the Energy Commission, shall direct electrical corporations
to file applications for programs and investments to accelerate
widespread transportation electrification to reduce dependence on
petroleum, meet air quality standards, achieve the goals set forth in
the Charge Ahead California Initiative (Chapter 8.5 (commencing with
Section 44258) of Part 5 of Division 26 of the Health and Safety
Code), and reduce emissions of greenhouse gases to 40 percent below
1990 levels by 2030 and to 80 percent below 1990 levels by 2050.
Programs proposed by electrical corporations shall seek to minimize
overall costs and maximize overall benefits. The commission shall
approve, or modify and approve, programs and investments in
transportation electrification, including those that deploy charging
infrastructure, via a reasonable cost recovery mechanism, if they are
consistent with this section, do not unfairly compete with
nonutility enterprises as required under Section 740.3, include
performance accountability measures, and are in the interests of
ratepayers as defined in Section 740.8.
(c) The commission shall review data concerning current and future
electric transportation adoption and charging infrastructure
utilization prior to authorizing an electrical corporation to collect
new program costs related to transportation electrification in
customer rates. If market barriers unrelated to the investment made
by an electric corporation prevent electric transportation from
adequately utilizing available charging infrastructure, the
commission shall not permit additional investments in transportation
electrification without a reasonable showing that the investments
would not result in long-term stranded costs recoverable from
ratepayers.
(d) This section applies to an application to the commission for
transportation electrification programs and investments if one of the
following conditions is met:
(1) The application is filed on or after January 1, 2016.
(2) The application is filed before January 1, 2016, but has an
evidentiary hearing scheduled on or after July 1, 2016.
SEC. 33. Section 9505 of the Public Utilities Code is amended to
read:
9505. (a) By March 15, 2013, and by March 15 of each year
thereafter, each local publicly owned electric utility shall report
to the Energy Commission and to its customers all of the following:
(1) Its investments in energy efficiency and demand reduction
programs.
(2) A description of each energy efficiency and demand reduction
program, program expenditures, the cost-effectiveness of each
program, and expected and actual energy efficiency savings and demand
reduction results that reflect the intent of the Legislature to
encourage energy savings and reductions in emissions of greenhouse
gases resulting from providing service to existing residential and
nonresidential buildings, while taking into consideration the effect
of the program on rates, reliability, and financial resources.
(3) The sources for funding of its energy efficiency and demand
reduction programs.
(4) The methodologies and input assumptions used to determine the
cost-effectiveness of its energy efficiency and demand reduction
programs.
(5) A comparison of the local publicly owned electric utility's
annual targets established pursuant to subdivision (b) and the local
publicly owned electric utility's reported electricity efficiency
savings and demand reductions.
(b) By March 15, 2013, and by March 15 of every fourth year
thereafter, each local publicly owned electric utility shall identify
all potentially achievable cost-effective electricity efficiency
savings and shall establish annual targets for energy efficiency
savings and demand reduction for the next 10-year period, consistent
with the annual targets established by the Energy Commission pursuant
to subdivision (c) of Section 25310 of the Public Resources Code. A
local publicly owned electric utility's determination of potentially
achievable cost-effective electricity efficiency savings shall be
made without regard to previous minimum investments undertaken
pursuant to Section 385. A local publicly owned electric utility
shall treat investments made to achieve energy efficiency savings and
demand reduction targets as procurement investments.
(c) Within 60 days of establishing annual targets pursuant to
subdivision (b), each local publicly owned electric utility shall
report those targets to the Energy Commission, and the basis for
establishing those
targets.
(d) Each local publicly owned electric utility shall make
available to its customers and to the Energy Commission the results
of any independent evaluation that measures and verifies the energy
efficiency savings and the reduction in energy demand achieved by its
energy efficiency and demand reduction programs.
SEC. 34. Section 9620 of the Public Utilities Code is amended to
read:
9620. (a) Each local publicly owned electric utility serving
end-use customers, shall prudently plan for and procure resources
that are adequate to meet its planning reserve margin and peak demand
and operating reserves, sufficient to provide reliable electric
service to its customers. Customer generation located on the customer'
s site or providing electric service through arrangements authorized
by Section 218, shall not be subject to these requirements if the
customer generation, or the load it serves, meets one of the
following criteria:
(1) It takes standby service from the local publicly owned
electric utility on a rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
(2) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup power is not supplied from the electricity
grid.
(3) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
(b) Each local publicly owned electric utility serving end-use
customers shall, at a minimum, meet the most recent minimum planning
reserve and reliability criteria approved by the Board of Trustees of
the Western Systems Coordinating Council or the Western Electricity
Coordinating Council.
(c) Each local publicly owned electric utility shall prudently
plan for and procure energy storage systems that are adequate to meet
the requirements of Section 2836.
(d) A local publicly owned electric utility serving end-use
customers shall, upon request, provide the Energy Commission with any
information the Energy Commission determines is necessary to
evaluate the progress made by the local publicly owned electric
utility in meeting the requirements of this section, consistent with
the annual targets established pursuant to subdivision (c) of Section
25310 of the Public Resources Code.
(e) The Energy Commission shall report to the Legislature, to be
included in each integrated energy policy report prepared pursuant to
Section 25302 of the Public Resources Code, regarding the progress
made by each local publicly owned electric utility serving end-use
customers in meeting the requirements of this section.
SEC. 35. Section 9621 is added to the Public Utilities Code, to
read:
9621. (a) This section shall apply to a local publicly owned
electric utility with an annual electrical demand exceeding 700
gigawatthours, as determined on a three-year average commencing
January 1, 2013.
(b) On or before January 1, 2019, the governing board of a local
publicly owned electric utility shall adopt an integrated resource
plan and a process for updating the plan at least once every five
years to ensure the utility achieves all of the following:
(1) Meets the greenhouse gas emissions reduction targets
established by the State Air Resources Board, in coordination with
the commission and the Energy Commission, for the electricity sector
and each local publicly-owned electric utility that reflect the
electricity sector's percentage in achieving the economywide
greenhouse gas emissions reductions of 40 percent from 1990 levels by
2030.
(2) Ensures procurement of at least 50 percent eligible renewable
energy resources by 2030 consistent with Article 16 (commencing with
Section 399.11) of Chapter 2.3.
(3) Meets the goals specified in subparagraphs (C) to (H),
inclusive, of paragraph (1) of subdivision (a) of Section 454.52.
(c) (1) The integrated resource plan shall address procurement for
the following:
(A) Energy efficiency and demand response resources pursuant to
Section 9615.
(B) Energy storage requirements pursuant to Chapter 7.7
(commencing with Section 2835) of Part 2 of Division 1.
(C) Transportation electrification.
(D) A diversified procurement portfolio consisting of both
short-term and long-term electricity, electricity-related, and demand
response products.
(E) The resource adequacy requirements established pursuant to
Section 9620.
(2) (A) The governing board of the local publicly owned electric
utility may authorize all source procurement that includes various
resource types, including demand-side resources, supply side
resources, and resources that may be either demand-side resources or
supply side resources, to ensure that the local publicly owned
electric utility procures the optimum resource mix that meets the
objectives of subdivision (b).
(B) The governing board may authorize procurement of resource
types that will reduce overall greenhouse gas emissions from the
electricity sector and meet the other goals specified in subdivision
(b), but due to the nature of the technology or fuel source may not
compete favorably in price against other resources over the time
period of the integrated resource plan.
(d) A local publicly owned electric utility shall satisfy the
notice and public disclosure requirements of subdivision (f) of
Section 399.30 with respect to any integrated resource plan or plan
update it considers.
SEC. 36. Section 9622 is added to the Public Utilities Code, to
read:
9622. (a) Integrated resource plans and plan updates adopted
pursuant to Section 9621 shall be submitted to the Energy Commission.
(b) The Energy Commission shall review the integrated resource
plans and plan updates. If the Energy Commission determines an
integrated resource plan or plan update is inconsistent with the
requirements of Section 9621, the Energy Commission shall provide
recommendations to correct the deficiencies.
(c) The Energy Commission may adopt guidelines to govern the
submission of information and data and reports needed to support the
Energy Commission's review of the utility's integrated resource plan
pursuant to this section at a publicly noticed meeting offering all
interested parties an opportunity to comment. The Energy Commission
shall provide written public notice of not less than 30 days for the
initial adoption of guidelines and not less than 10 days for the
subsequent adoption of substantive changes. Notwithstanding any other
law, any guidelines adopted pursuant to this section shall be exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 37. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 38. The provisions of this act are severable. If any
provision of this act or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
